The oil major today reported a 13 per cent fall in profits due to weaker oil and North American gas prices.
Increased oil production was unable to offset losses and the share price has fallen 2.9 per cent in today’s trading.
However, Miah says that the long-term prospects for the company still look good and recommends that income-seekers take the opportunity to add to their exposure.
"Despite the earnings shortfall, due to factors out of the company’s control, we still recommend Royal Dutch Shell ‘B’ as a ‘buy’ to represent a core holding in an investor’s portfolio," he said.
Shell has two share classes listed on the London Stock Exchange. The ‘A’ shares are subject to a Dutch withholding tax of 15 per cent, meaning the ‘B’ shares are preferable to the UK investor.
Data from FE Analytics shows that 367 funds in the IMA universe list Royal Dutch Shell in their top-10 holdings.
These include some of the best-known portfolios in the industry, such as FE Alpha Manager Tom Dobell’s M&G Recovery; Artemis Income, managed by Adrian Frost and Adrian Gosden; Nigel Thomas’ AXA Framlington UK Select Opportunities and, in the global market, Newton Higher Income.
Industry stalwart Anthony Nutt’s Jupiter Income fund is one of the most heavily exposed, with a weighting of 8.72 per cent, while Alastair Mundy’s Investec UK Special Situations fund isn't far behind, with 8 per cent in the stock.
Data from FE Analytics shows that Shell has returned 48.26 per cent to investors over the last five years while the FTSE All Share Index has returned just 2.92 per cent.
Performance of stock vs index over 5-yrs
Source: FE Analytics
Miah adds that the company is looking to expand its business, which should boost profitability over the coming years.
"The company provides attractive yields and exposure to the energy market," he explained.
"It is hungry to find more resources and the projects it is undertaking should ensure it is well positioned to make the most of energy price rises, if the global economy manages to show some decent growth."
"The group’s capital investment programme has increased operational uptime, performance and costs. Investors will be pleased to hear that these programmes should help drive oil and gas production growth for many years to come."
"There are currently 20 major upstream projects under construction and we believe this will help increase production capacity and keep costs under control."
"The company continues to look at offloading non-core operations to build high potential exploration acreage, including shale and deep water fields."
The shale gas story has been described by commodities analysts as one of the most exciting investment opportunities in recent years.
A recent FE Trustnet article highlighted how technological advances in gas fracking methods mean that the natural resource is now far easier to extract, which is leading to huge investment in the industry.