Sample Essay

The region of energy exploration is also one of potential conflict and could result in difficulties. Furthermore, aggressive actions are already being taken by the dominant energy companies in the world including multinationals and big consortiums to acquire the few resources that are available and competition for good drills is also on.

These factors lead to Centrica having to suffer a relatively low PE ratio compared to industry and why analysts post a lower confidence level on its stock for the long term future. However forces are in motion such as inIraqrecently that show that management is aiming to rectify that via heavy investments and bids for field access.

The P/E is also low as the comparative ratio relates to the Oil and Gas sector where oil prices have undergone considerable volatility, staying at the high end for some period of time as well as the actions of OPEC weighing on the prices to a great extent. Thus oil companies have tended to enjoy greater earnings and spikes in prices which may not be easily replicated by the gas exploration companies such as Centrica.

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Essay: Centrica’s P/E Ratio
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