Course Code: FIN 460 Semester: Autumn

Group name
RANDOM GROUP 1’

Topic: Investment decision based on financial performance

Group Representative / Leader Name: Avishake Saha

ID: 1921232

Phone Number: 01810766189

Submitted By

Name ID Contribution
Industry analysis, Excel work of
1) AVISHAKE SAHA 1921232 Totalengeries SE, Ratio analysis
Ratio Analysis, Excel work of Shell plc,
2) MD ATIQUE ARSHAD SHAFIN 1930172 Conocophillips
Ratio Analysis, Excel work of Exxon
3) KAZI TANJIDUR RAHMAN 1921434 mobil, Chevron corp.

Date of submission: 28th November 2022

 Letter of Transmittal
28th November 2022,
To,
Mr. Anwar Zahid
Course Instructor,
School of Business and Entrepreneurship,
Independent University, Bangladesh

Subject:

Dear Sir,
This is to inform you that we have completed the report that you had assigned us for the course
Fin460 for the autumn semester 2022. For the report, we have selected five companies: Exxon
Mobil Corporation, Chevron Corporation, Shell plc, ConocoPhillips, TotalEnergies SE to work
on.

While writing this report, we have followed all the instructions you have given us in the class, and
we have applied relevant concepts that we have learned throughout our course. So it became an
extremely interesting experience for us.

However, we will be glad to clarify any discrepancies that may arise. Lastly, thank you for your
supportive consideration and thoughts. Without your inspiration, this report would have been an
incomplete one.

Yours sincerely,
Avishake Saha
Md Atique Arshad Shafin
Kazi Tanjidur Rahman
 Acknowledgement
In preparing our report, we had to rely on the help and guidelines of our respected faculty, who
deserve our greatest gratitude. The completion of this assignment gives us much pleasure. We
would like to express our appreciation to Mr. Anwar Zahid Sir, Lecturer, Department of Finance,
Independent University Bangladesh, for providing us with a solid guideline for the assignment
during numerous consultations. We would also like to extend our deepest gratitude to all those
who have directly and indirectly guided us in writing this assignment.

We have made valuable comments and suggestions on this proposal, which gave us the inspiration
to improve our report by a large margin. We thank all the people for their help directly and
indirectly in completing our report. Thank you.
 Table of Contents
Introduction ................................................................................................................................... 01
Industry analysis ........................................................................................................................... 02
Pro Forma Financial Statement ..................................................................................................... 03
Ratio Analysis ............................................................................................................................... 07
Expected Return ............................................................................................................................ 12
Standard Deviation........................................................................................................................ 13
Du Pont ......................................................................................................................................... 14
Conclusion .................................................................................................................................... 15
References ..................................................................................................................................... 16
 Introduction
Exxon Mobil
Exxon Corporation and Mobil Corporation merged to establish Exxon Mobil Corporation, a U.S.
oil and gas business, in 1999. It has operations and investments in coal, nuclear fuels, chemicals,
mineral ores, and petroleum and natural gas as one of the top three global oil and energy
companies. Exxon Mobil operates one of the largest fleets of tankers in the world as well as oil
fields, service stations, pipelines, and other components of the entire petroleum sector. Exxon and
Mobil were both born out of Standard Oil, which was established in the late 1800s (see Standard
Oil Company and Trust). Exxon Mobil was one of the three biggest oil firms in the world at the
start of the twenty-first century.

Chevron Corporation
An integrated energy corporation is Chevron Corp. The company supports U.S. and foreign
companies engaged in fully integrated petroleum operations, chemicals operations, mining
operations, power generation, and energy services with administrative, financial, management, and
technological support. Upstream and Downstream are the two business segments it uses to run its
operations. The Upstream segment's operations are primarily focused on finding, developing, and
producing crude oil and natural gas, as well as processing, transporting, and higher stability
liquefied natural gas, moving crude oil through significant international oil export pipelines, and
undertaking a gas-to-liquids project. The main activities in the downstream section include refining
crude oil to produce petroleum products, selling crude oil and refined goods, and shipping crude
oil and refined products through pipeline, ship, and motor vehicle.

Shell PLC
Shell plc is a British multinational oil and gas company headquartered in London, England. Shell
is a public limited company with a primary listing on the London Stock Exchange (LSE) and
secondary listings on Euronext Amsterdam and the New York Stock Exchange. It is one of the oil
and gas "supermajors" and by revenue and profits is consistently one of the largest companies in
the world. Measured by both its own emissions, and the emissions of all the fossil fuels it sells,
Shell was the ninth-largest corporate producer of greenhouse gas emissions in the period 1988–
2015.

ConocoPhillips Company
ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon
exploration and production. It is based in the Energy Corridor district of Texas. The company has
operations in 15 countries and has production in the United States (49% of 2019
production), Norway (10% of 2019 production), Canada (5% of 2019 production), Australia (12%

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of 2019 production), Indonesia (4% of 2019 production), Malaysia (4% of 2019
production), Libya (3% of 2019 production), China (3% of 2019 production), and Qatar (6% of
2019 production). The company's production in the United States included production in Alaska,
the Eagle Ford Group, the Permian Basin, the Bakken Formation, the Gulf of Mexico and
the Anadarko Basin. Approximately 1/3 of the company's U.S. production is in Alaska, where it
has operations in the Cook Inlet Area, the Alpine oil field off the Colville River, and the Kuparuk
oil field and Prudhoe Bay Oil Field on the Alaska North Slope.

TotalEnergies SE

TotalEnergies generates and sells electricity, natural gas, and fuels. One hundred thousand of our
coworkers are working tirelessly to make clean, dependable, cheap energy available to as many
people as possible. Their aim to become the trustworthy global energy leader and operations span
more than 130 countries. Administration, leadership and oversight at the corporate level. There is
no more important part of our governance structure than the Board of Directors and the executive
leadership. To realize our vision of being a global leader in the energy transition, they employ a
value driven strategy that informs all of our decisions and interactions with our stakeholders.

Industry Analysis
We have selected five Yahoo Finance listed companies from Energy industries. The companies
were picked based on some fundamental criteria. The majority of our research was conducted via
the Yahoo Finance site and industry annual reports.
Exxon Mobil is a publicly traded firm with over 63,000 workers located in and around its
headquarters in Texas. At least eight US industries (mining, oil drilling and gas extraction,
manufacturing, petroleum refining, lubricant oil production, gasoline and petroleum bulk stations,
natural gas liquid processing, motor oil production, and manufacturing) account for a significant
portion of the company's overall revenue in the country. Revenue-wise, the Motor Oil
Manufacturing sector is where they rake in the most dough at an estimated 23.8% of the sector's
total. The Exxon Mobil Corporation is a frontrunner among the major integrated oil and gas
companies. Exxon Mobil Corporation has, through time, revolutionized the way Basic Materials
are traded. The market capitalization of Exxon Mobil Corporation, which trades on the New York
Stock Exchange (NYSE), is $345.51 billion.
One of the largest integrated energy businesses in the world, Chevron Corporation produces and
distributes crude oil, natural gas, petrochemicals, and additives. Lubricants and fuels for vehicles
are also refined, marketed, and distributed by the company. Expertise, assets, devotion, a network
of trusted partners, technology, and financial strength are just some of the ways in which Chevron
stands apart from the competition.

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Shell plc, formerly known as Royal Dutch Shell Plc, operates in all stages of the oil and gas
industry. The firm is also involved in the liquefied natural gas (LNG), gas-to-liquids (GTL),
biofuel, and New Energies Because of its success in the oil and gas business, Royal Dutch Shell,
or Shell, has become a major player on the international stage. As of right now, the firm is most
well-known for generating liquefied natural gas (LNG), and as a result, it has established itself as
a leading player in the field it has chosen (West et al., 2018). The company's most up-to-date
description of its core operations in its target market is that it sells and buys natural gas, LNG,
electricity, and carbon-emission rights, and that it also markets and trades these commodities.
ConocoPhillips is a multinational oil company headquartered in Houston, Texas (USA). It is the
fourth biggest non-government refiner in the world and the second largest in the United States.
They own a diverse and high-quality asset portfolio and conduct a myriad of international
commercial activities. They're venturing into a promising new industry. The company's greatest
strength is the dedication and expertise of its workforce, which allows it to remain competitive and
secures the company's future.

Total SA, now called Total Energies SE, is a French oil business engaged in petroleum extraction,
refining, distribution, and trading. In this article, we draw on the company's financials for the past
four years to draw conclusions about its current financial health. Profitability, liquidity, leverage,
and cash flow ratios are used as the foundation for the study. According to the data, the company's
income and profitability have been on the slide, which can be related to the ongoing COVID-19
epidemic. Both the quick and current ratios for the firm are more than 1, indicating that it has
sufficient short-term liquidity to pay down its short-term liabilities without having to liquidate any
of its fixed assets. The leverage ratios further demonstrated that the corporation is profitable due
to the combination of asset value and shareholder equity. In spite of this, the research revealed that
the majority of the company's fixed assets are funded by debts, which puts the business in a
precarious financial position. Since the corporation is financially solid according to the examined
parameters, it should be considered for investment.

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 Pro Forma Financial Statement
Pro forma financial statements are financial reports given by an entity, utilizing assumptions or
speculative circumstances about occasions that might have happened in the past or which might
happen from here on out. These statements are utilized to introduce a perspective on corporate
outcomes to outcasts, maybe as a component of an investment or loan proposal. A budget may
likewise be viewed as a minor departure from pro forma financial statements since it presents the
projected consequences of an organization during a future period considering specific
assumptions.

For the pro forma statement, we have calculated and used the sales average growth rate percentage
from the past years to forecast the growth rate percentages for 2022 for each company. We have
taken some main indicators from the income statements and balance sheets as well for the
comparisons which are done below in the table.

Pro Forma Statement – Exxon Mobil Corporation

Particulars 2022 2021 2020 2019

Income Statement
Revenue 311,290 285,502 181,502 264,938
Gross profit 69,967 64,202 30,942 53,786
Net profit after tax 25,109 23,040 -22,440 14,340
Balance Sheet
Total Asset 369,358 338,923 332,750 362,597
Total Liability & Equity 369,358 338,923 332,750 362,597
*Millions of USD $
Here in the above table, we can see that by working on the past data, the forecasted growth rate
for 2022 of revenue rise to $311,290 from $285,502 in 2021, which means they may get higher
level of sales than before. In 2022gross profit margin, the amount has increased to $69,967 from
$64,202 in 2021, which means that the company can make reasonable profit on sales as long as it
keeps indirect costs manageable. Moreover, the net profit after tax increase to $25,109 from
$23,040. However, the company’s total assets, total liabilities and equity are forecasted to be
increased to the same level to $369,358

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Pro Forma Statement – Chevron Corporation

Particulars 2022 2021 2020 2019

Income Statement
Revenue 113,125 162,464 94,692 146,516
Gross profit 7,446 66,253 39,705 62,267
Net profit after tax 41,903 15,625 -5,543 2,924
Balance Sheet
Total Asset 264,471 239,535 239,790 237,428
Total Liability & Equity 264,471 239,535 239,790 238,428
*Millions of USD $
Here in the above table, we can see that by working on the past data, the forecasted growth rate
for 2022 of revenue decrease to $113,125 from $162,646 in 2021, which means they may get low
level of sales than before. In 2022 gross profit margin, the amount has decreased to $7,446 from
$66,253 in 2021, which means that the company cannot make reasonable profit on sales as long
as it keeps indirect costs manageable. Moreover, the net profit after tax increase to $41,903 from
$15,625. However, the company’s total assets, total liabilities and equity are forecasted to be
increased to the same level to $264,471.

Pro Forma Statement – Conoco Phillips

Particulars 2022 2021 2020 2019

Income Statement
Revenue 51,785,640 45,828,000 18,784,000 32,567,000
Gross profit 16,687,840 14,768,000 841,000 9,313,000
Net profit after tax 17,280,936 15,292,864 -3,080,715 5,612,728
Balance Sheet
Total Asset 102,446,930 90,661,000 62,618,000 70,514,000
Total Liability & Equity 102,446,930 90,661,000 62,618,000 70,514,000
*Millions of USD $

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Here in the above table, we can see that by working on the past data, the forecasted growth rate
for 2022 of revenue rise to $51,785,640 from $45,828,000 in 2021, which means they may get
higher level of sales than before. In 2022 gross profit margin, the amount has increased to
$16,687,840 from $14,687,000 in 2021, which means that the company can make reasonable profit
on sales as long as it keeps indirect costs manageable. Moreover, the net profit after tax increase
to $17,280,936 from $15,292,864. However, the company’s total assets, total liabilities and equity
are forecasted to be increased to the same level to $102,446,930

Pro Forma Statement – Shell PLC

Particulars 2022 2021 2020 2019

Income Statement
Revenue 287,654,400 261,504,000 180,543,000 344,877,000
Gross profit 39,433,900 35,849,000 -12,995,000 36,755,000
Net profit after tax 65,408,753 59,462,503 -58,375,827 55,918,069
Balance Sheet
Total Asset 444,816,900 404,379,000 379,266,000 404,336,000
Total Liability & Equity 444,816,900 404,379,000 379,266,000 404,336,000

Here in the above table, we can see that by working on the past data, the forecasted growth rate
for 2022 of revenue rise to $287,654,400 from $261,504,000 in 2021, which means they may get
higher level of sales than before. In 2022 gross profit margin, the amount has increased to
$39,433,900 from $35,849,000 in 2021, which means that the company can make reasonable profit
on sales as long as it keeps indirect costs manageable. Moreover, the net profit after tax increase
to $65,408,753 from $59,462,503. However, the company’s total assets, total liabilities and equity
are forecasted to be increased to the same level to $444,816,900.

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Pro Forma Statement – TotalEnergies SE

Particulars 2022 2021 2020 2019

Income Statement
Revenue 2,12,32,91,00,000 1,84,63,40,00,000 1,19,70,40,00,000 1,76,24,90,00,000
Gross profit 59,80,92,00,000 52,00,80,00,000 19,61,10,00,000 44,03,10,00,000
Net profit after tax 18,82,09,00,000 16,36,60,00,000 -7,33,60,00,000 11,43,80,00,000
Balance Sheet
Total Asset 3,37,47,67,00,000 2,93,45,80,00,000 2,66,13,20,00,000 2,73,29,40,00,000
Total Liability &
3,37,47,67,00,000 2,93,45,80,00,000 2,66,13,20,00,000 2,73,29,40,00,000
Equity

Here in the above table, we can see that by working on the past data, the forecasted growth rate
for 2022 of revenue rise to 2,12,32,91,00,000 from $1,84,63,40,00,000 in 2021, which means they
may get higher level of sales than before. In 2022 gross profit margin, the amount has increased to
$59,80,92,00,000 from $52,00,80,00,000 in 2021, which means that the company can make
reasonable profit on sales if it keeps indirect costs manageable. Moreover, the net profit after tax
increase to $18,82,09,00,000 from $16,36,60,00,000. However, the company’s total assets, total
liabilities and equity are forecasted to be increased to the same level to $3,37,47,67,00,000.

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 Ratio Analysis
Earnings Per Share (EPS)
A significant financial indicator of a company's profitability is earnings per share, or EPS. It is
computed by dividing the business's net income by the total number of outstanding shares. Market
players typically use this technique to evaluate a company's profitability before purchasing its
shares.

EARNING PER SHARE

Exxon Mobil Chevron Corp. Cononco Phillips Shell Plc TotalEnergies SE

151.8
18.35

13.79

11.55
9.71

8.14
7.75

6.15
5.39
4.99
4.88

4.32
4.19

3.36

1.54

2018 2019 2020 -2.56 2021

-2.85
-2.96
-5.25

-14.98

From the graph we can see that Exxon Mobil Corporation before COVID 2018-19 (EPS) was 4.88
and 3.36. In the year of COVID, in 2020 it has decreased to -5.26. But after 2020, in 2021 Exxon
Mobil EPS increased to 5.39. Increasing EPS indicates that the company’s health is good and
provides positive or higher return to the shareholders. Chevron Corporation before COVID 2018-
19 EPS was 7.75 and 1.54. Shareholders face high level of decrease in EPS in 2019 compared to
2018. In 2020, in the year of COVID their EPS down to -2.96. But after the year of COVID EPS
increased to 8.14. Which is very good side for a company and their shareholders. They are
struggling with their EPS before 2021. But they recover very well in 2021. Conoco Phillips EPS
in 2018 was 9.71, which is good. In 2019 it decreased to 4.99. But in 2020, in the year of COVID
it again decreased to -2.85 which wasn’t good for their shareholders. But after COVID recovery,
in 2021 EPS of Conoco Phillips increased to 11.55. Which is much higher than last 3 years. It
indicates that the company’s health is good and provides higher return to the shareholders.
TotalEnergies SE EPS in 2018-2019 was 4.19 and 4.32. In 2020 it decreased to -2.56. In 2021 it
again increased to 6.15.

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Price to earnings (P/E) ratio
The price-to-earnings ratio is a reliable place to start when attempting to gauge how pricey a firm
is. The ratio shows how much money investors will spend on each dollar of potential future
profits. A company's P/E ratio offers insight compared to other companies in the same industry or
the sector. Due to the post-pandemic, it may be challenging to determine what kind of earnings the
market will generate.

PRICE TO EARNINGS RATIO

Exxon Mobil Chevron Corporation Conoco Phillips Shell PLC TotalEnergies SE
77.57
20.6

14.48
13.96
13.86

11.34

11.26
10.8

8.73

6.68
4.08
2.94
5.9

4.8
0.28
2018 2019 2020 2021
-2.29
-7.77

-13.2

-17.69
-29.33

From the graph, we can assess the following company’s price to earnings ratio (P/E). During 2018-
2019 Exxon Mobil P/E ratio was13.86 and 20.6. During COVID P/E ratio was negative. When the
P/E ratio is negative, the business is either losing money or has negative earnings. But in 2021 the
P/E ratio again increased. Chevron corporation P/E ratio in 2019 was much higher compared to
2018. But in 2020, in the year of COVID P/E ratio was negative, which is -29.33. In 2021 it again
increased. P/E ratio of Conoco Phillips in 2018 was 5.9. In 2019, it increased to 10.8. But in the
year of COVID it was down to -13.2. After COVID they are trying to recover. No specific number
indicates expensiveness, but stocks with P/E ratios of below 15 are typically considered cheap,
while stocks above about 18 are considered expensive. Shell Plc P/E ratio was always low in these
4 years. In 2018 and 2019 it was just 2.94 and 4.08. In the year of COVID, in 2020 it decreased to
-2.29. After COVID it was just increased to 0.28. A high P/E ratio may indicate that a company's
stock is overpriced or that investors expect rapid future growth rates. TotalEnergies SE P/E ratio
in 2018 was 11.34. It decreased to 8.73 in 2019. In the year of COVID it again decreased to -17.69.
In 2021 it increased to 6.68.

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Return on Equity
Return on equity (ROE) is a financial ratio that shows how well a company is managing the capital
that shareholders have invested in it. Return on equity signifies how good the company is at
generating returns on the investment it received from its shareholders. Description:
Mathematically, Return on Equity = Net Income or profits per shareholder's equity. The
denominator is essentially the difference between a company's assets and liabilities.

RETURN ON EQUITY
Exxon Mobil Chevron Corporation Conoco Phillips Shell PLC TotalEnergies SE
37.82
35.77

33.92
33.89
29.36
16.05

14.23
13.11
11.17
10.03
10.5

9.59
9.52

7.21
2.01

2018 2019 2020 2021

-4.18

-6.92
-10.32
-13.67

-36.82

According to the graph, we can see that the return on equity before COVID during 2018-19 and
after COVID 2020-2021 is not good as ROE for most firm. An ROE level 15%-20% is generally
considered good. High and stable ROE is generally better. In the graph we can see that the ROE
level of Conoco Phillips and Shell Plc was good compared to others. Except 2020, they always
have high ROE rate.

Dividend Payout Ratio

The dividend payout ratio is the proportion of earnings paid out as dividends to shareholders,
typically expressed as a percentage. The dividend payout ratio, sometimes referred to simply as
the payout ratio, is a financial metric that helps you understand the total amount of dividends paid
to shareholders of the company. It is commonly calculated on a per-share basis by dividing annual
dividends per common share by earnings per share (EPS).
Payout ratios have a great deal of predictive potential since they show what stage of development
a business is in. The dividend payout ratios in different industries might be very different.
According to the graph, Exxon Mobil Limited had a dividend payment ratio ranging from 18.6 to
25.91 percent for the following firms in 2018–19. Our formula considers the future, this increases

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the chance that the company may reduce its tips. To maintain a favorable retention ratio, the
corporation would either refrain from raising its dividend or decline it. Chevron Corporation
dividend payout ratio for the 2018–19 fiscal year ranged from 14.46% to 77.12%. Shell PLC's
dividend payout ratio during the 2018–19 fiscal year ranged from 7.76 percent to 10.66 percent.
ConocoPhillips (COP) was 3.14% and 8.41. Total Energies SE dividend payout ranged from 68 to
70 percent. But in 2020 it was deserter. After the period of deserter in 2021 it was 49.91. However,
companies like ConocoPhillips (COP), Shel PLC, Exxon Mobil, Chevron Corporation. have
dividend payout ratios that were in a bad position during 2020.–But in 2021 made some progress.
In contrast, the dividend paid by Shell PLC & ConocoPhillips Ltd. was less.

DIVIDEND PAYOUT RATIO

TotalEnergies SE Exxon Mobil Chevron Corporation Shell PLc ConocoPhillips

77.12
66.98

70.5
49.91

0.03930257

25.91
16.47
16.33

14.46
16.8
10.63

8.41

7.76

3.14
1.73

2021 2020 2019 2018

-4.91

-15.05
-16.56

-43.52
-121.05

Dividend Yield
The dividend yield, which is expressed as a percentage, is the sum paid to shareholders for holding
a share of a company's stock divided by its current stock price. Some people consider dividend
yields a form of interest rate because they assess how productive investment is. Large dividend
payments to shareholders might indicate a variety of business characteristics. For instance, the
company could currently be undervalued, or it might be an attempt to entice many new investors.
On the other hand, if a company pays little to no dividends, it may be overpriced or attempting to
boost the value of its capital.

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From the graph, we can see that during the years 2018 to 2019, the dividend yield of Total Energies
SE was 6 % to 7%, ConocoPhillips (COP) was 0.53% to 0.78% and Shell Plc was in the range of
2%. Chevron Corporation was 1.04% and .99% & Exxon Mobil was around 1.21% and 1.26%
During COVID, 2020–2021, ConocoPhillips (COP) dividend yield was around 1.14% to 0.36%.
Shell Plc were much lower, 2.15% to 1.41%. It has a low dividend yield compared to other
companies in the industry. A ratio of less than one means that the company's dividend yield is
lower than the industry average Chevron Corporation was between a 1.48% and 1.14% increase
and Exxon Mobil also increase which was 2.13% and 1.45%. The range of Total Energies SE was
between 6% and 7%, which was almost the same as before. Higher-yielding dividend stocks
provide more income, but higher yields often come with greater risk.

DIVIDEND YIELD
TotalEnergies SE ConocoPhillips (COP) Shell PLC Chevron Corporation Exxon Mobil

7.67
7.47

6.84

6.22

2.64
2.61
2.15

2.13
1.48
1.45
1.41

1.26

1.21
1.14

1.14

1.04
0.99
0.78

0.53
0.36

2021 2020 2019 2018

Expected Return
An expected return indicates the amount of profit or loss which an investor is forecast to receive
on their investment. From the graph, we can understand that among the five different industries,
Conoco Phillips Limited has the highest expected return, which means an investor will receive the
most profit by investing in Conoco Phillips Limited. The amount is almost 14.04%. So, for short-
term investment, Conoco Phillips Limited would be the better choice for investors.
Chevron Corporation has the second highest expected return, which is much lower than Conoco
Phillips Limited. It has an expected return of only 2.44 percent, which is significantly lower than
the average annual rate of return that most investors consider to be a respectable ROI for long-

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term investments. However, if an investor makes a long-term investment, he may obtain a larger
return on investment in the future because it is a positive return.

Exxon Mobil have the third highest, which is very much lower compared to the first two
companies. Exxon Mobil only has -0.82%, which is much lower compared to the expected return
on equity.

Total Energies SE has the second highest expected return, which is 8.14%. So, an investor should
invest in Total Energies SE.

Finally, Shell Plc has the lowest expected rate of return, which is only -3.67%. The investors will
face a loss in the future as Shell Plc has a negative return on investment. So, they should not invest
in Shell Plc.

EXPECTED RETURN
16 14.04
14
12
10 8.14
8
6
4 2.44
2
0
-2
-0.82
-4
-6 -3.67
ConocoPhillips Chevron
TotalEnergies SE Shell Plc Exxon Mobil
(COP) Corporation
Expected Return 8.14 -3.67 14.04 -0.82 2.44

Standard Deviation
Standard deviation helps us to understand market volatility or the distribution of asset prices from
their average price. From the graph we can see that Exxon Mobil Limited has the highest standard
deviation of almost 38.6%, which is much higher compared to other companies. But it also means
it has a higher risk as the price is moving widely. Higher risk indicates a higher return. So, investors
like to invest in risky stocks rather than low-risk stocks.

Total Energies has the lowest standard deviation of only 19.98%, which means it has the lowest
risk. Low risk also indicates that Total Energies has the lowest return.

By following the formula, COP has 37.45%, Chevron Corporation has almost 27.95%, and Shell
PLC has almost 26.74% of standard deviation. So, if an investor wants to invest in these stocks,

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they should put more money into Exxon Mobil Limited and less money into the other companies,
based on standard deviation.

STANDARD DEVIATION
45 38.6
40 37.45
35
27.95 26.74
30
25 19.98
20
15
10
5
0
ConocoPhillips Chevron
TotalEnergies SE SHELL PLC Exxon Mobil
(COP) Corporation
Standard Deviation 19.98 37.45 27.95 26.74 38.6

Standard Deviation

DuPont Analysis
The DuPont analysis is a famous paradigm for comparing the operational efficacy of two identical
organizations; it was pioneered by the DuPont Corporation. The DuPont analysis is a helpful tool
for separating the components that affect return on equity (ROE). An effective method for
dissecting the components that contribute to return on equity is called a DuPont analysis. An
investor can use this type of study to evaluate the relative merits of two competing businesses.
DuPont analysis is a useful tool for managers in determining where improvements are needed.

DUPONT ANALYSIS
40
33.68 33.915
35
30
25
20
13.99 13.12
15 9.37
10
5
0
ConocoPhillips Chevron
TotalEnergies SE SHELL PLC Exxon Mobil
(COP) Corporation
DuPont Analysis 13.99 33.68 9.37 33.915 13.12

DuPont Analysis

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 Conclusion
Among the 5 listed companies that we have selected, based on the financial ratios and other
indicators, we have seen that during 2018-2019 the overall financial situation of the companies
was standard on average.
During 2020–2021, the dividend yield for the company Total Energies was the highest among all,
and the lowest was for Shell PLC. However, the return on equity for Shell PLC was negative for
both years, which could be due to the low level of sales that had been made to the investors.
Regarding earnings per share, all companies were horribly in a bad situation in 2020, but then they
tried their best to overcome it in 2021. Moreover, the scenarios were totally reversed before the
pandemic, with the highest level of earnings per share. Within the dividend payout ratio and price-
to-earnings ratio, However, in both ratios, COP in 2020 had the highest value in ratios.
Regarding the Du Pont Analysis of the company, Shell Plc Ltd., the Du Pont Analysis of the stock
is 33.915%.
However, if we consider the standard deviation and expected return calculations, which have been
made according to the companies, COP Ltd has the highest expected return at 14.04% as well as
the percentage of standard deviation at 37.45%. The higher the risk, the greater the return an
investor can expect. Shell PLC had the lowest expected return of -3.67% and the standard deviation
at 26.74% among all.
Overall, as an investor, we will be investing in COP Ltd as it gives the highest return and also
analyses the highest rate of risk as well.

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 References

Chevron corp. (n.d.). Retrieved from

https://finance.yahoo.com/quote/CVX?p=CVX
Conocophillips. (n.d.). Retrieved from
https://finance.yahoo.com/quote/COP?p=COP
Exxon mobil corp. (n.d.). Retrieved from
https://finance.yahoo.com/quote/XOM?p=XOM
shell plc. (n.d.). Retrieved from https://finance.yahoo.com/quote/SHEL?p=SHEL
Totalenergies se. (n.d.). Retrieved from
https://finance.yahoo.com/quote/TTE?p=TTE

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