Critical Analysis: Shell (NYSE:SHEL) versus Mexco Energy (NYSE:MXC)

Mexco Energy (NYSE:MXC) and Shell (NYSE:SHEL) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Insider and Institutional Ownership

5.9% of Mexco Energy shares are owned by institutional investors. Comparatively, 28.6% of Shell shares are owned by institutional investors. 53.0% of Mexco Energy shares are owned by insiders. Comparatively, 1.0% of Shell shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Mexco Energy and Shell”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mexco Energy	$6.93 million	3.33	$1.35 million	$0.57	19.75
Shell	$296.76 billion	0.67	$19.36 billion	$4.86	13.25

Shell has higher revenue and earnings than Mexco Energy. Shell is trading at a lower price-to-earnings ratio than Mexco Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mexco Energy and Shell’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mexco Energy	17.59%	6.94%	6.37%
Shell	5.17%	14.54%	6.86%

Risk & Volatility

Mexco Energy has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Shell has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Mexco Energy and Shell, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mexco Energy	0	0	0	0	0.00
Shell	0	3	4	3	3.00

Shell has a consensus target price of $81.75, indicating a potential upside of 26.96%. Given Shell’s stronger consensus rating and higher possible upside, analysts plainly believe Shell is more favorable than Mexco Energy.

Summary

Shell beats Mexco Energy on 11 of the 15 factors compared between the two stocks.

About Mexco Energy

Mexco Energy Corporation, an independent oil and gas company, engages in the acquisition, exploration, development, and production of natural gas, crude oil, condensate, and natural gas liquids in the United States. It owns partial interests in approximately 6,400 gross producing wells located in the states of Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Wyoming, Kansas, Colorado, Montana, Virginia, North Dakota, and Ohio. It also owned leasehold mineral, royalty, and other interests in approximately 2,768 net acres. The company was formerly known as Miller Oil Company and changed its name to Mexco Energy Corporation in April 1980. Mexco Energy Corporation was incorporated in 1972 and is based in Midland, Texas.

About Shell

Shell plc operates as an energy and petrochemical company Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. It explores for and extracts crude oil, natural gas, and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products; and operates upstream and midstream infrastructure to deliver gas to market. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, carbon-emission rights; and markets and sells LNG as a fuel for heavy-duty vehicles. In addition, it trades in and refines crude oil and other feed stocks, such as low-carbon fuels, lubricants, bitumen, sulphur, gasoline, diesel, aviation fuel, and marine fuel; produces and sells petrochemicals for industrial use; and manages oil sands activities. Further, the company produces base chemicals comprising ethylene, propylene, and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide, and ethylene glycol. Additionally, it generates electricity through wind and solar resources; produces and sells hydrogen; and provides electric vehicle charging services. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc in January 2022. Shell plc was founded in 1907 and is headquartered in London, the United Kingdom.