With crude popping 2% today and looking to continue increasing throughout the rest of the year, which of these two major oil companies do you like more?
Now, just today, RDS gained a small %, while XOM gained substantially, which is pretty much the opposite of what happened yesterday so it all evens out.
Now for some DD
RDS is supposedly spending 10B over the next year on various infrastructure projects including LNG, and permian Shale oil. The company has a ton of FCF right now, and has an extremely attractive P/E and forward P/E, both superior to what XOM boasts. Then there's that dividend. Almost 6% is nice It's quite a bit off it's price target of 81
XOM has traditionally performed a bit better over the last 4 years than RDS. It's going the opposite route and not investing as much in infrastructure, mostly because it already has a ton in the permian, and it's sort of sitting pretty waiting for profits to accrue. It matches the sector in terms of P/E, and has a dividend of slightly less than 4%. It's ROE has, and is currently superior to RDS by several % points. It's only slightly below the price target of 88, but I imagine there will be an upgrade here soon.
Going forward it seems like XOM has slightly clearer path towards growth, but it really depends on how RDS pulls off the stuff, which is why the price seems a bit depressed right now is what I would imagine.
Any thoughts? I'd love some other ideas on these two majors or even an additional one.
Submitted September 19, 2018 at 04:33PM by loredon https://ift.tt/2xneXDE
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