Struggling For Stocks To Buy? Royal Dutch Shell Plc Is Top Of My List

With the FTSE 100 having had a tremendous run in 2013, you may be stuck for what to buy. I’d recommend you buy Royal Dutch Shell Plc (LON: RDSB).

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I was intrigued to read recently that TPG (one of the world’s biggest private equity groups) has taken the unusual step of asking investors in its $19bn flagship fund if it can have an extra year to spend an additional $3bn of unspent capital.

Indeed, the fund is even offering to waive various management fees so as to obtain the consent it seeks from its limited partners.

Clearly, TPG is struggling for things to buy and, although private equity groups may have a very different investment universe to Fools like us, I seem to be coming across quite a few private investors who are also faced with a similar problem.

Of course, it is of little surprise since the FTSE 100 is currently trading on a price-to-earnings (P/E) ratio of 14.8. Naturally, many investors will feel that there is, therefore, not much worth buying.

Well, not all of the market is too pricey…

One stock that I’m excited about is Royal Dutch Shell (LSE: RDSB) (NYSE: RDS-B.US). It had a slightly disappointing set of results recently, which saw shares fall but, in my view, the market overreacted because Shell remains a compelling investment.

Clearly, a large number of private investors are going to be concerned about the Bank of England’s decision to raise the inflation target from 2% to 2.5%. This is akin to accepting that inflation will be higher in future than it has been in the past. Therefore Shell’s yield of 5% is extremely welcome.

In addition, Shell trades on a P/E that is nowhere near the FTSE 100 P/E of 14.8. In fact, Shell’s P/E is less than two-thirds of this at 8.6. Furthermore, this compares favourably to the oil and gas sector that has a P/E of 12.7.

So, if you want to buy a high-yielding stock at a good price, Shell should be top of your list. In fact, there are 5 other stocks that should be on your list too and you can view them by clicking here for an exclusive report.

It’s completely free and the companies featured are most accurately described as ‘5 Shares You Can Retire On’.

> Peter owns shares in Shell.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Close-up of British bank notes
Investing Articles

I’d buy 1,064 shares of this dividend growth stock for £1,000 a year in passive income

Shares in FTSE 100 conglomerate Bunzl come with a 2% yield at today’s prices. But Stephen Wright thinks this is…

Read more »

Growth Shares

Under 50? Here are 3 monster growth stocks to consider for 2024 and beyond

These US-listed growth stocks could deliver blockbuster gains for long-term investors in the years ahead, says Edward Sheldon.

Read more »

Investing Articles

Here’s how much I’d need to invest in Tesco shares for £100 in monthly passive income

Our writer does not own shares of this supermarket for passive income, but how many would he need to buy…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could £200 of Christmas money be used to start buying shares this month?

Our writer reckons if he was a stock market novice, he could put some Christmas money to work and start…

Read more »

Close-up of British bank notes
Investing Articles

Here’s how I’d aim to build a £250 monthly second income in 2024 – and far beyond!

Our writer thinks buying carefully-chosen dividend shares could help him build a second income over the long term. Here's his…

Read more »

Investing Articles

If I’d put £10k into a FTSE 250 tracker 10 years ago, here’s what I’d have now

UK investors love FTSE 250 tracker funds. But have these products been a good investment over the long term? Edward…

Read more »

Risk reward ratio / risk management concept
Investing Articles

I’d use a Stocks and Shares ISA to invest in low-risk equities and let the passive income roll in

Stephen Wright thinks a Stocks and Shares ISA can be a valuable way of generating tax-efficient passive income even for…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

With no savings at 30, I’d use Warren Buffett’s golden rules to build wealth

Dr James Fox explains how he can use the legendary teachings of Warren Buffett to turn an empty portfolio into…

Read more »