Both BP and Shell are international energy giants involved in all aspects on the energy supply chain. BP with means British Petroleum before growing internationally, while Shell was initially Dutch now with an international reach from Africa to Asia. In this article we review and analyse both companies from an investment perspective. Our review is based on our own analysis and does not refer to an endorsement of any these companies.
From the companies fundamentals, financial analysis shows that both companies have good profitablity based on return on asset (ROA), return on investment (ROI) and return on equity (ROE). When we look at the company liquidity based on current ratio we see also similar values. However, when we look at solvency ratio based on debt ratios we notice similar ratio, Shell having higher long term debt, than BP which is to be understood as it recently acquired BG.
Both companies although both good investment, as they as both trading on a premium prices. Shell appears to be the better investment with roughly 4500million barrels oil reserves compared to BP’s 1696 thousand million barrel oil reserves as of the end of 2017. However, BP is trading at a lower price than Shell meaning there is also an opportunity for growth.