7 Blue Chip Stocks with Low PE Ratios

02. Shell plc (NYSE:SHEL)

Forward Price to Earnings (P/E) ratio: 8.83

Number of Hedge Fund Holders: 49

Shell plc (NYSE:SHEL) is a prominent name in the energy industry, known for its global presence in oil, gas, and renewable energy. As of October 11, 2024, the company boasts a forward price-to-earnings (P/E) ratio of 8.83, making it an attractive blue-chip stock with a low P/E ratio. This low valuation presents a compelling opportunity for value-focused investors, especially when considering the company’s strong financial performance and commitment to capital discipline.

In Q2 2024, Shell plc (NYSE:SHEL) exceeded earnings expectations, reporting an EPS of $1.97, surpassing analysts’ estimates of $1.82. This impressive result was driven by a robust performance across various segments, particularly in Integrated Gas and Upstream operations. Shell plc (NYSE:SHEL) adjusted earnings for the quarter were $6.3 billion, and it generated $13.5 billion in cash flow from operations, underscoring the company’s ability to generate significant cash even amid challenging market conditions.

Shell plc (NYSE:SHEL) strategic investments in liquefied natural gas (LNG) and upstream projects, such as the ADNOC Ruwais LNG project and new ventures in the Gulf of Mexico and Brazil, are expected to drive future growth. These initiatives will add substantial volumes to its LNG portfolio, enhancing its position as a global leader in the LNG market. Furthermore, Shell’s focus on operational efficiency is evident in its continued progress on cost-cutting measures, having already delivered $1.7 billion out of the targeted $2-3 billion in structural operating expense reductions.

The company’s strong balance sheet and shareholder returns strategy are additional points of appeal. In Q2 2024, Shell announced a $3.5 billion share buyback program, marking the 11th consecutive quarter of returning over $3 billion to shareholders. This consistent commitment to buybacks and dividends showcases Shell’s dedication to delivering value to its investors.

In summary, Shell plc (NYSE:SHEL) solid financials, strategic growth initiatives, and low P/E ratio make it a top choice for investors looking for blue-chip stocks with strong fundamentals and long-term growth potential.