Retirement saving: 2 reasons why I’m bullish on the prospects for the Shell share price

Royal Dutch Shell plc (LON: RDSB) appears to offer significant long-term investing potential.

| More on:

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.

With the oil price having soared in the last year, it is unsurprising that Shell (LSE: RDSB) has done likewise. The oil and gas major has recorded capital growth of 19% in the same time period, and there could be much more to come. Not only does the oil price have further upside potential, the company’s valuation still seems to be relatively low given its long-term potential.

Of course, Shell is not the only energy-related stock which could be worth buying. Reporting on Monday was an alternative energy company that could be a strong performer in the coming years.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Improving outlook

The oil price could continue the rise which has seen it move increasingly closer to $100 per barrel in recent months. Although the consensus among major oil-producing nations is for higher production over the medium term, the reality is that supply disruption remains a serious threat to global supply. The political outlook for Iran could lead to reduced production which is unable to be offset by higher production elsewhere. And with Venezuela also facing a period of political instability, it would be unsurprising for demand growth to exceed supply growth over the medium term.

This would clearly be good news for Shell. Even after its share price rise of recent months, it continues to offer a wide margin of safety given its diverse asset base. It has a dividend yield of 5.5%, which remains historically high for the company and suggests that investors remain cautious about its outlook.

Certainly, there is scope for further volatility in the stock’s valuation. The oil price could fall, for example, and hurt investor sentiment. However, with the company seeking to utilise its rising free cash flow to reduce debt and it being engaged in an asset disposal programme, its future appears to be highly sustainable. As such, the potential for a higher oil price and its low valuation mean that Shell could be a sound retirement stock.

Growth potential

Of course, cleaner forms of energy are likely to become increasingly in demand among consumers over the long run. As such, investing in energy storage and clean fuel company ITM Power (LSE: ITM) could be a shrewd move. The company released final results on Monday which showed that it continues to deliver on its development potential.

It was able to increase revenue by 53% versus the prior year, with it focusing its efforts on increasing headcount and planning larger production facilities. They could help it to deliver on its ambitious growth plans, while it seeks to maximise a growing portfolio of revenue-generating assets in the shape of the first real hydrogen refuelling network in the UK.

With ITM Power having raised £29.4m of working capital during the year, it appears to have the financial firepower to invest for future growth. While a lossmaking business today, in the long run it could deliver impressive financial performance and a rising share price.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Peter Stephens owns shares of Royal Dutch Shell B. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here’s a FTSE 250 stock to buy to benefit from the construction boom!

Jabran Khan details a FTSE 250 stock that could be primed to benefit from the infrastructure and construction boom.

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Is the Royal Mail share price a buying opportunity?

With a 6% dividend yield and a price-to-earnings ratio of 3, is the Royal Mail share price in buying territory?…

Read more »

Scene depicting the City of London, home of the FTSE 100
Investing Articles

3 FTSE 100 shares! Should I buy them?

I'm searching for the best FTSE 100 stocks to buy following recent market volatility. Are these blue-chip UK shares too…

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Should I buy one of the cheapest shares on the FTSE 100 index?

This Fool explores one of the cheapest stocks on the FTSE 100 index by share price and decides if he…

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

With trading suspended, where could the Eurasia Mining (LON:EUA) share price go next?

This morning, the EUA share price was suspended pending an announcement - so could improving sales send the share price…

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

Are the FTSE 100’s top income stocks a bargain?

The FTSE 100 is renowned for its value and dividend stocks. So, are the index's top income stocks worth a…

Read more »

Compass pointing towards 'best price'
Investing Articles

Scottish Mortgage shares have slumped 40%. Time to buy now?

Scottish Mortgage Investment Trust (LON: SMT) shares have rewarded shareholders well in recent years. I'm thinking of buying now they're…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

3 recession stocks I’d buy in a hurry

With the economic outlook getting worse, our writer highlights a trio of recession stocks he would consider buying for his…

Read more »