RBC Capital Markets has named two major global oil and gas companies to its list of the best ideas in global energy. Since its launch nearly a decade ago, the investment bank’s list has outperformed its benchmark by nearly 200%. New companies include US, UK and European-listed multinational oil and gas giant Shell and Australian oil exploration and production company Woodside Energy. The additions come as Royal Bank of Canada revamps its list of preferred energy stocks, removing Australian oil and gas producer Santos. Stocks on RBC’s Global Energy Best Ideas list collectively performed strongly last month, down just 0.5%. However, it still outperformed the iShares Global Energy ETF, which fell 2.5% during the same period. Over the longer term, RBC’s stock list has soared 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 Series After adding Shell to its basket, RBC analysts led by Greg Pardy said there was “a constructive structure for the stock.” “Clarity of management’s messaging and strong operating results in recent quarters have driven positive sentiment on the back of a valuation discount,” analysts said. RBC expects the stock to rise 20% over the next 12 months. Last year, Shell Chief Executive Wael Sawan said the company would raise its dividend by 15% and increase its share buyback rate while keeping oil production steady until 2030. The stock is up nearly 12% and has a dividend yield of 3.7%. Royal Bank of Canada is also bullish on Woodside Energy, Australia’s largest independent oil and gas producer, and included it in its energy basket. The stock also trades in the United States. The investment bank noted the company’s recent success at its Sangomar oil project off the coast of Senegal, pointing to impressive preliminary oil drilling results. RBC also expects the company’s debt-to-equity ratio to decline more than the company’s current guidance. Other stocks in the RBC Energy Basket include:
