Today we're going to take a closer look at large-cap Energy company Royal Dutch Shell PLC, whose shares are currently trading at $65.91. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Shell plc operates as an energy and petrochemical company Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of None and an average price to book (P/B) ratio of None. In contrast, Royal Dutch Shell PLC has a trailing 12 month P/E ratio of 7.8 and a P/B ratio of 2.29.
When we divide Royal Dutch Shell PLC's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -0.9. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.