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Royal Dutch Shell Shares

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  • IronWolf
    IronWolf Posts: 6,445 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Glen_Clark wrote: »
    Sure, but wouldn't that be already reflected in their PE ratio?
    (A reduction of the valuation in their reserves reduce their earnings)

    Yes it will all be priced in, the value of the company should be the discounted cash flows that will be received until the reserves are gone. But it's so dependent on the price of oil its impossible to predict them.
    Faith, hope, charity, these three; but the greatest of these is charity.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    According to TD Waterhouse Shell has (forward PE) of 7.6 and dividend yield of 5.5% (never been reduced), so yes looks cheap.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
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