- Royal Dutch Shell (RDS.A +0.2%) appears barely affected by a Barron's cover story this weekend which calls it "the world's best big oil stock," whose makeover could lift shares by more than 20% in a year even without a rise in oil prices.
- Barron’s Jack Hough says Shell’s cost cuts and divestments look like more like a "recommitment to capitalism" rather than just an austerity drive, and has increased confidence in the company’s lofty 6.6% dividend yield.
- Hough writes that if CEO Ben van Beurden’s plan works, Shell can generate $20B-$25B/year in average free cash flow by 2019-21 after meeting its capex needs, while turning in a 10% average return on capital employed; the figure compares with organic free cash flow of just $5B/year on average over the past three years and would provide more than enough money to quickly bring down debt and keep dividends coming as well as share buybacks.