Shells Considering Switching ‘Undervalued’ Listing to New York

The UK’s most valuable company is considering leaving the “undervalued” London stock market for New York, a move that could be detrimental to Britain’s financial services sector. Former and current Shell bosses have signalled that switching the company listing to the New York Stock Exchange (NYSE) was not off limits. Commenting on the gap between stock market valuations for the London-listed Shell and its NYSE-listed rivals, such as Exxon Mobil Corp. and Chevron Corp, Shell CEO Wael Sawan said, “I have a location that clearly seems to be undervalued.” Shell’s free-cash-flow (FCF) yield—a ratio between the cash generated from the core operations of a company relative to its valuation—is higher than 12 percent. In contrast, Exxon trades under 7 percent and Chevron’s average is 6.5 percent. A high FCF yield may indicate that the company’s shares are undervalued....