TXO Partners (NYSE:TXO) versus Shell (NYSE:SHEL) Financial Comparison

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

Analyst Ratings

This is a breakdown of current ratings for Shell and TXO Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shell	0	2	3	0	2.60
TXO Partners	0	0	1	1	3.50

Shell presently has a consensus price target of $79.67, indicating a potential upside of 10.08%. TXO Partners has a consensus price target of $26.00, indicating a potential upside of 42.94%. Given TXO Partners’ stronger consensus rating and higher probable upside, analysts plainly believe TXO Partners is more favorable than Shell.

Valuation and Earnings

This table compares Shell and TXO Partners’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shell	$323.18 billion	0.72	$19.36 billion	$5.42	13.35
TXO Partners	$380.72 million	1.47	-$103.99 million	($3.32)	-5.48

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

Volatility & Risk

Shell has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, TXO Partners has a beta of -0.18, indicating that its stock price is 118% less volatile than the S&P 500.

Dividends

Shell pays an annual dividend of $2.75 per share and has a dividend yield of 3.8%. TXO Partners pays an annual dividend of $2.32 per share and has a dividend yield of 12.8%. Shell pays out 50.7% of its earnings in the form of a dividend. TXO Partners pays out -69.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Shell has increased its dividend for 2 consecutive years and TXO Partners has increased its dividend for 1 consecutive years. TXO Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

28.6% of Shell shares are owned by institutional investors. Comparatively, 27.4% of TXO Partners shares are owned by institutional investors. 1.0% of Shell shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Shell and TXO Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shell	5.83%	13.78%	6.40%
TXO Partners	-27.31%	6.89%	5.16%

Summary

Shell beats TXO Partners on 12 of the 18 factors compared between the two stocks.

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.

About TXO Partners

TXO Partners, L.P., an oil and natural gas company, focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The company was formerly known as TXO Energy Partners, L.P. and changed its name to TXO Partners, L.P. in May 2023. TXO Partners, L.P. was incorporated in 2012 and is based in Fort Worth, Texas.