General presentation of Royal Dutch Shell:
Let's start our analysis of Royal Dutch Shell shares with a detailed presentation of the company and its activities. This first part will help you understand who the company is and how it achieves its turnover through the different segments in which it is present.
Royal Dutch Shell is an oil company which is one of the Big Oils in this sector along with companies like Total, BP and Exxon Mobil. It's specialized in the production and distribution of oil and natural gas.
This company mainly carries out activities related to refining and energy distribution. At present, we know that the group is at the head of around fifteen refineries and that it also operates a network of service stations with over 45,000 units located throughout the world. These oil and gas refining and distribution activities alone represent nearly 85.1% of the turnover achieved each year by Royal Dutch Shell. But within these activities, there are also more specific ancillary activities such as the production of petrochemicals including olefins, aromatics, solvents, ethylene, propylene, phenols and additives. The Royal Dutch Shell group has also recently been producing solar energy.
The Royal Dutch Shell group also has activities related to the exploration and production of crude oil and natural gas. These activities generate approximately 14.9% of the revenue of this business. Finally, the group is currently developing other activities for the production of wind energy and oil sands.
The Royal Dutch Shell group owes its success to its international development strategy, which today allows it to be present on all continents. As a result, the company achieves nearly 28.5% of its turnover in Europe. The rest of its revenues come at 40.6% from Asia-Middle East and Africa, 24.1% from the United States and 6.8% from the rest of America.
With respect to the stock market data to know regarding the Royal Dutch Shell share, it's worth noting that the number of this company's shares in circulation on the market is 4,101,239,499 and that the company has reached a total market capitalization of 63 068.86 million euros. The price of this share on the stock exchange is currently listed on compartment A of the Euronext Amsterdam market.
What are the strengths and weaknesses of Royal Dutch Shell in its market?
Another thing to consider if you are looking to buy Royal Dutch Shell shares or trade on this stock price live are the strengths and weaknesses, especially facing the competition within the oil market.
Bear in mind that the competitive advantages available to Royal Dutch Shell are numerous. Don't forget that this company is one of the most important in the world in the energy sector. The Royal Dutch Shell group is positioned among the Big Oil, meaning groups such as Total, BP or Exxon Mobil which hold the most shares in this market.
There is also the strength of the financial growth of this company which has continued to develop its turnover and income over the decades. Apart from the losses suffered during the oil crises, Royal Dutch Shell has always been able to maintain its profitability and even increase its income over time so as to be ever more important in its sector. Another major advantage that this oil group has at its disposal relates to its technological innovations, particularly in the field of exploration and production, which allow it to reduce its costs and increase its productivity.
Finally, this company has established itself in all strategic world markets, in particular with a current presence in over 90 countries and the large network of service stations at its disposal (more than 40,000).
Although the Royal Dutch Shell group shows undeniable strengths which should allow it to grow even more in the years to come, the company also has some weak points that it is important to know before making any decision. We know that its activities depend heavily on legal issues, particularly with regard to the environment. Royal Dutch Shell, like other oil companies before it, has already been the subject of controversy regarding certain environmental or human rights issues that can still damage its image today.
It is also important to take into account the threat that competition from other major oil companies poses to Royal Dutch Shell and its market share.
How to carry out the fundamental analysis of the Royal Dutch Shell share price?
Let's go a little further by taking a closer look at a type of analysis essential to anticipate future variations in the Royal Dutch Shell share price, namely the fundamental analysis. This fundamental analysis consists in using certain publications or future events which could have an influence on the price of this share. Here are some tangible examples.
Among the factors most likely to have an influence on this value is the price of crude oil and its variations. As Royal Dutch Shell's activities are still strongly focused on this market, a significant drop in crude oil prices, signifying a drop in demand, could have a negative impact on this stock.
You should also closely monitor the strategy put in place by the company with the aim of diversifying its activities and in particular its recent reorientation towards green energies. The planned drop in fossil fuels such as oil, over the long term, must be effectively anticipated by the company if it wishes to maintain its place among the leaders in this sector of activity.
Other elements you can use to carry out this fundamental analysis of the Royal Dutch Shell share price, is to closely monitor the establishment of strategic partnerships and other alliances with other companies aimed at expanding its customer base or gain profitability. Strategic sale or acquisition operations of activities will also be elements to watch.
You should also keep a close eye on the regulations in force in the countries in which the group generates the majority of its income and which may either favour its activities or, on the contrary, weigh on its development and growth.
Finally, it's also important to take into account the annual and quarterly financial results of this group. Royal Dutch Shell regularly publishes its detailed results on its website and this information is subsequently taken up by specialized websites. However, make sure you compare these figures with analysts' forecasts as well as with any objectives of the growth plans communicated by the group to its shareholders.
How to set up a technical analysis of the Royal Dutch Shell share price?
As seen above, the fundamental analysis of the Royal Dutch Shell share is particularly interesting for ascertaining the stock market evolution capacities of its share with as much precision as possible. But this analysis should never be used alone. It's therefore strongly recommended to also carry out a quality technical analysis of this particularly volatile share.
But what does the technical analysis of the Royal Dutch Shell share consist of? A technical analysis simply refers to the analysis of the prices of this stock historically speaking and over a given period. You should therefore use a live stock market chart of this value in real time. By studying how this stock has behaved in the past in certain situations, it's possible to attempt to detect future trends when circumstances are close or similar.
Tips for increasing the effectiveness of a Royal Dutch Shell technical analysis are to first make sure you use a good chart. The more customizable and technological the chosen chart, the easier it will be to interpret the signals.
Ideally, you should use several types of technical indicators. Among the indicators to favour and which are most often used by investors, are volatility indicators, trend indicators, strategic reversal or acceleration points such as pivot points or levels of technical support and resistance. Most of the sophisticated charts offered by online brokers or by websites specializing in the Stock Exchange offer to display several indicators simultaneously for a complete reading.