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Share of the Week from The Share Centre
Graham Spooner, investment research analyst at The Share Centre, picks oil giant Royal Dutch Shell as his share of the week. Here’s why:
“Royal Dutch Shell has issued generally positive updates over the last two years. The group has also started to benefit from restructuring, which focused on recovering demand, especially in Asia, and cost efficiency which has so far delivered 3.5bn of savings. The company has been further helped by the rise in price of oil.
“Growth seeking investors will be pleased to see that the management has plans that could increase cash flow by 50% in 2012 if oil averages 60 a barrel and by 80% at 80 a barrel. With tensions in the Middle East rising again in relation to Iran, the price of oil looks likely to be higher than this level for some time.
“With the current dividend yield standing just under 5%, the shares are also attractive for income seekers and are viewed as a core holding for any blue chip income geared portfolio. New large projects in Canada and Qatar are also set to significantly boost an already impressive cash flow and earnings. As a result, there is every chance of increasing dividends in the future.
“We agree with the CEO that there is more to come from Royal Dutch Shell and recommend medium risk investors, who are looking for a reasonable yield and potential for growth, should ‘buy’ the stock. UK investors should ‘buy’ Royal Dutch Shell ‘B’ as they are not liable to Dutch tax.”
THIS DATA IS PROVIDED BY THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
Risk Warnings:
Investing in general, and the products and services mentioned above may not be suitable for all: if in doubt, individuals should seek independent financial advice. The value of investments and the income from them can go down as well as up and investors may not get back their original investment. Past performance is not a reliable indicator of future performance.
The bases and levels of taxation relating to ISAs, CTFs and SIPPs are subject to change and the value of these tax allowances may depend upon the circumstances of the individual.
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Back2012-01-11 11:40:38 © Moneyextra.com