According to my data, no company in the FTSE 100 is cheaper than Royal Dutch Shell Plc (LON:RDSB) on both a P/E and yield basis.
Royal Dutch Shell (LSE: RDSB) (NYSE: RDS-B.US) is the bluest of blue-chip shares. The company employs 90,000 people worldwide. It is a true global titan with over a century of history.
Today, Shell trades on the kind of valuation that one might expect from a weaker company with worse prospects. Yet the oil giant looks as strong as ever.
Shell's dividend is a thing of beauty. Year-in, year-out, Shell keeps paying up. In dollar terms, the dividend has not been cut since the second World War. Not only is the yield high, the cash payout is enormous. In 2011, Shell paid out more cash in dividends than any other UK company. It is expected to do the same again this year.
The average FTSE 100 share is forecast to yield 3.2%. This year, the market is expecting Shell to pay $1.84 in dividends. That equates to a forecast yield of 5.4%. Analysts expect Shell's dividend to increase 4.3% in 2014.
Only a handful of shares could likely yield more in 2013.
Today, Shell trades on just 9 times last year's earnings per share. With 8.4% of earnings growth forecast for 2013, the P/E for this year is 8.3 times expected earnings.
The average FTSE 100 company trades on a historic P/E of 16.7. Average forecast earnings growth is slightly higher among other FTSE 100 constituents at 9.5%. While Shell is cheaper than nearly all FTSE 100 companies, it is expected to grow more slowly than most.
This perception could be a result of recent falls in the price of crude oil. In the last three months, crude prices have fallen by around 9%. In that time, shares in Shell are off by 3%. While the price of oil will affect Shell's earnings, it has historically had little correlation with the company's share price.
Even if Shell is the cheapest share in the FTSE 100 today, that doesn't mean that the shares will go on to post huge rises. Our analysts here at the Motley Fool believe that they have found a better growth prospect. Like Shell, their top pick has a long history and is a dominant player in its markets. If you want to learn all about the opportunity that our team's top growth pick presents, get the free Motley Fool report "The Motley Fool's Top Growth Share For 2013". This reserach is completely free and will be delivered to your inbox immediately. Just click here to get your copy today.
> David does not own shares in any of the above companies.