RBC adds global oil, gas stocks to superbly outperforming energy list

RBC Capital Markets added two major global oil and gas companies to its Global Energy Best Ideas list. The investment bank’s list has outperformed its benchmark by nearly 200% since its inception about a decade ago. The newly added companies are Shell , a multinational oil and gas giant listed in the U.S. , U.K. , and Europe , and Woodside Energy, an Australian petroleum exploration and production company. Those additions come as RBC adjusts its list of preferred energy stocks, simultaneously removing Santos , an Australian oil and gas producer. The stocks in the RBC Global Energy Best Ideas list were collectively resilient last month, declining by just 0.5%. However, it still outperformed the iShares Global Energy ETF , which fell by 2.5% during the same time. Over the long term, RBC’s list of stocks has surged by more than 188% since its inception in February 2013, dwarfing the iShares Global Energy ETF’s 38.2% growth over the same period. IXC 5Y line On adding Shell to its basket, RBC analysts led by Greg Pardy said there was a “constructive set-up for the stock”. “Clarity on the message from management as well as strong operational performance in recent quarters have driven sentiment positive, supported by a discounted valuation,” the analysts said. RBC expects the stock to rise by 20% over the next 12 months. Last year, Shell CEO Wael Sawan said the company will ramp up its dividend by 15% and increase the rate of its share buybacks while keeping oil output steady into 2030. The strategy marks a pivot from his predecessor’s strategy for transitioning to clean energy. The stock is up nearly 12% and trades with a dividend yield of 3.7%. RBC has been equally bullish on Woodside Energy , Australia’s largest independent oil and gas producer, and its inclusion in its energy basket. The stock is also traded in the United States. The investment bank noted the company’s recent success with its Sangomar oil project off the coast of Senegal, noting impressive initial oil drilling results. RBC also expects the company’s debt-to-equity ratio to fall more than the company’s current guidance. The other stocks in RBC’s energy basket include: