Is Shell plc (SHEL) the Best Energy Stock to Invest in Now?

As the energy landscape evolves, investors are increasingly seeking companies that can navigate the shifting dynamics and capitalize on new opportunities. One name that stands out in this regard is Shell plc (SHEL), the world's largest integrated energy company. But is SHEL the best energy stock to invest in now? Let's delve into the company's strengths, recent developments, and financials to make an informed decision.



Shell plc's diversified business model is a significant advantage in the ever-changing energy sector. The company operates across the entire oil and gas value chain, from exploration and production to refining and marketing. This diversification allows SHEL to optimize its portfolio and adapt to market conditions. Moreover, Shell's global reach enables it to capitalize on opportunities in various regions, further enhancing its resilience and growth potential.

One of Shell's key strategic moves has been its focus on liquefied natural gas (LNG). The company believes that natural gas will play a foundational role in the energy transition over the next few decades. SHEL's robust LNG portfolio, coupled with its trading capabilities and global reach, positions it well to meet the growing demand for energy sources. The recent startup of Mero-3 in Brazil and the ongoing development of LNG Canada are testament to Shell's commitment to this segment.



Shell plc's strategic acquisitions and partnerships have also bolstered its competitive position in the energy sector. In 2024, SHEL acquired a 50% stake in the LNG Canada project, which is expected to produce 14 million tons of LNG per year. This acquisition aligns with Shell's strategy to capitalize on the growing demand for LNG, particularly in Asia. Additionally, Shell's partnership with the Chinese company CNOOC in the offshore Penglai oilfield has allowed it to expand its operations in the lucrative Chinese market. These strategic moves have not only expanded Shell's global footprint but also diversified its revenue streams, making it a strong contender in the energy sector.



Shell plc's commitment to renewable energy and sustainability initiatives is another factor that enhances its long-term investment prospects. The company aims to reduce its net carbon footprint by 50% by 2050, with an interim target of 30% by 2035. This commitment is reflected in its investment in renewable energy projects, such as the Borssele III and IV offshore wind farms in the Netherlands, and the acquisition of a 49% stake in the 1.2 GW BayWa re wind farm in Germany. Additionally, Shell is expanding its electric vehicle charging network, with plans to install 500,000 chargers by 2025. These initiatives not only contribute to Shell's sustainability goals but also position the company to capitalize on the growing demand for renewable energy and low-carbon solutions.



In terms of financials, Shell plc boasts a strong balance sheet with a market cap of $189.24 billion and an enterprise value of $223.12 billion. The company's trailing PE ratio of 12.10 and forward PE ratio of 8.17 indicate a reasonable valuation, while its return on equity (ROE) of 8.37% and return on invested capital (ROIC) of 7.09% demonstrate solid profitability. SHEL's dividend yield of 4.48% and dividend growth of 11.24% over the past year also make it an attractive choice for income-oriented investors.



In conclusion, Shell plc's diversified business model, strategic acquisitions, commitment to renewable energy, and robust financials make it a strong contender for the best energy stock to invest in now. As the energy landscape continues to evolve, SHEL's adaptability and forward-thinking approach position it well to capitalize on new opportunities and deliver long-term growth. However, it's essential to conduct thorough research and consider your risk tolerance before making any investment decisions.