Financial Comparison: Royal Dutch Shell PLC (RDS.B) & InterOil (IOC)

Royal Dutch Shell PLC (NYSE: RDS.B) and InterOil (NYSE:IOC) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Royal Dutch Shell PLC and InterOil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Dutch Shell PLC	0	0	0	0	N/A
InterOil	0	0	0	0	N/A

Earnings and Valuation

This table compares Royal Dutch Shell PLC and InterOil’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Royal Dutch Shell PLC	N/A	N/A	N/A	$1.96	N/A
InterOil	N/A	N/A	N/A	($3.70)	-13.07

InterOil is trading at a lower price-to-earnings ratio than Royal Dutch Shell PLC, indicating that it is currently the more affordable of the two stocks.

Dividends

Royal Dutch Shell PLC pays an annual dividend of $3.76 per share. InterOil does not pay a dividend. Royal Dutch Shell PLC pays out 191.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

5.3% of Royal Dutch Shell PLC shares are held by institutional investors. Comparatively, 46.6% of InterOil shares are held by institutional investors. 1.0% of Royal Dutch Shell PLC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Royal Dutch Shell PLC and InterOil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Dutch Shell PLC	2.93%	6.04%	2.80%
InterOil	-233.48%	-14.08%	-8.85%

Volatility and Risk

Royal Dutch Shell PLC has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, InterOil has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500.

Summary

Royal Dutch Shell PLC beats InterOil on 5 of the 8 factors compared between the two stocks.

About Royal Dutch Shell PLC

The Royal Dutch Shell plc explores for crude oil and natural gas around the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company’s segments include Integrated Gas, Upstream, Downstream and Corporate. The Integrated Gas segment is engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products, as well as projects with an integrated activity, ranging from producing to commercializing gas. The Upstream segment includes the operations of Upstream, which is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids, and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen from mined oil sands and conversion into synthetic crude oil. The Downstream segment is engaged in oil products and chemicals manufacturing, and marketing activities.

About InterOil

InterOil Corporation (InterOil) is an oil and gas business with a sole focus on Papua New Guinea (PNG). The Company’s segments include Upstream and Corporate. The Upstream segment includes exploration, appraisal and development of hydrocarbon structures in PNG. The Corporate segment provides support to the Company’s other business segments through business development and improvement activities, general services, administration, human resources, executive management, financing and treasury, government affairs and investor relations. InterOil holds interests across over four exploration and approximately two production retention licenses in the Eastern Papuan Basin of Papua New Guinea. Its assets include the Elk, Antelope, Triceratops, Raptor and Bobcat fields in the Gulf Province of Papua New Guinea, and exploration licenses covering approximately 16,000 square kilometers (over four million acres) in Papua New Guinea.