Contrasting Shell (NYSE:SHEL) and Braskem (NYSE:BAK)

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

Institutional and Insider Ownership

28.6% of Shell shares are owned by institutional investors. 1.0% of Shell shares are owned by insiders. Comparatively, 0.0% of Braskem shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Shell and Braskem, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shell	0	7	10	0	2.59
Braskem	0	2	1	0	2.33

Shell currently has a consensus price target of $76.71, indicating a potential upside of 4.63%. Braskem has a consensus price target of $9.75, indicating a potential upside of 207.09%. Given Braskem’s higher probable upside, analysts clearly believe Braskem is more favorable than Shell.

Volatility and Risk

Shell has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Braskem has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500.

Valuation & Earnings

This table compares Shell and Braskem”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shell	$289.03 billion	0.75	$16.09 billion	$4.44	16.51
Braskem	$14.36 billion	0.09	-$2.10 billion	($2.53)	-1.25

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shell	4.93%	10.67%	5.02%
Braskem	-7.36%	N/A	-0.30%

Summary

Shell beats Braskem on 12 of the 14 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 Braskem

Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The company operates through three segments: Brazil, United States and Europe, and Mexico. The Brazil segment produces and sells olefins, including ethylene, polymer and chemical grade propylene, butadiene, and butene-1; benzene, toluene, and xylenes products; fuels, such as automotive gasoline, liquefied petroleum gas, ethyl tertiary-butyl ether, and methyl tertiary-butyl ether; intermediates, such as cumene; aliphatics, aromatics, and hydrogenated solvents; and specialties comprising isoprene, dicyclopentadiene, piperylene, nonene, tetramer, polyisobutylene, and hydrocarbon resins. This segment also produces and sells polyethylene (PE) and polypropylene (PP); supplies electricity and other inputs to second-generation producers; produces and sells of PE, including the production of green PE from renewable resources; and produces and sells polyvinyl chloride and caustic soda. The United States and Europe segment produces and sells PP in the United States and Germany. The Mexico segment produces and sells ethylene, high-density PE, and low-density PE in Mexico. It also manufactures, sells, imports, and exports chemicals, petrochemicals, and fules; produces, supplies, and sells utilities, such as steam, water, compressed air, and industrial gases; and provides industrial services. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. Braskem S.A. was founded in 1972 and is headquartered in São Paulo, Brazil.