In its Weekday Trader column, financial news magazine Barron's touted shares of Royal Dutch Shell, the largest European oil company, saying the ''stands out among its big-oil peers as the best-of-breed play on the sector.'' Barron's highlighted Shell's growth at a reasonable price and 4.1% dividend yield.
Shell (RDS-A) is expected to post 20% earnings growth this year, and 25% next year, ahead of its peer, Barron's reported. The company recently reported an adjusted fourth-quarter profit of $4.1 billion, well below analysts' estimates, due to weak refining margins.
Shell's free cash flow is expected to rise to to 5% of revenue this year, and nearly 8% in 2012, Barron's reported. The average for the oil industry is 5%. The company is planning to spend $28 billion this year on new projects in an effort to boost output. A seven-year streak of production declines ended last year, Barron's noted.
Bulls consider Shell a proxy on the price of oil, which economists say could climb to $150 a barrel in the next 12 months, according to the magazine.
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