INVESTING SHOW: BP and Shell shares have bounced 45% in a year and pay big dividends, but will they be held back for not being green?

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Britain’s oil giants BP and Shell have rebounded powerfully since the vaccine rally in November 2020 with both seeing their shares up about 45 per cent in a year.

Fuelled by a resurgent global economy and the energy and oil price spike, both are raking in cash and paying big dividends of 4.8 per cent for BP and 4.1 per cent for Shell. Both shares are also still relatively cheap, with price-to-earnings ratios below 10.

But are they cheap for a reason and likely to remain so? At the same time as BP and Shell posted strong recent results, the Cop26 climate conference was getting into full swing and it is abundantly clear that the future perceived by the world’s leaders is not one of fossil fuels.

How much is that holding back BP and Shell shares now and will the effect get incrementally greater in years to come?

On this episode of the Investing Show, Simon Lambert and Richard Hunter, look at the oil giants’ prospects, their value status, and their attempts to shift to a greener future.

Both BP and Shell have outlined plans for a net zero future, how do they compare and are they likely to be achieved?

And with the shift to renewable energy impossible immediately, can investors tap a rich vein of profits for years to come and even make the case that they are being green by pushing for change from the inside?

Also, on this episode is a look at Britain’s other unloved but resurgent sector, the big banks, including Lloyds, NatWest, Barclays and HSBC shares.