Royal Dutch Shell has a Regal Dividen...
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May
9
Jonathan Yates
Royal Dutch Shell has a Regal Dividend
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With the stock markets reaching new highs, it is tough to find good buys.  But, as my father, who spent over 50 years in the securities industry, has always said, “There are always good buys in the stock market.”  The lofty levels have not kept Warren Buffett from buying, either.  Even with the Dow over 15,000, Royal Dutch Shell (NYSE: RDS-A) is worthy of consideration.

At a market cap of almost $230 billion, Royal Dutch Shell is “Big Oil” in every meaning of the phrase!

The oil and natural gas giant based in The Netherlands has sales of over $450 billion.  The dividend is also big: at 4.78% it is more than twice that of the average stock on the Standard & Poor’s 500 Index.  What is small is the price-to-earnings ratio at just 8.70.

In addition, the price-to-sales ratio is only 0.49.  That means that each dollar of sales by Royal Dutch Shell is valued at less than 50 cents in the share price.  That is very appealing to value investors as Benjamin Graham, the founder of the value school of investing, advocated finding investments that were trading at least one-third below market value.

As the chart below shows, Royal Dutch Shell has been soaring along with many, many other stocks.  For the last month of market action, Royal Dutch Shell is up by 8.71%.  Now trading around $72, it is very close to its year high of $74.26.



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