Phillips 66 (NYSE: PSX) and Sasol (NYSE:SSL) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitabiliy, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Phillips 66 and Sasol, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Phillips 66 0 10 4 0 2.29
Sasol 0 0 5 0 3.00

Phillips 66 presently has a consensus target price of $84.00, suggesting a potential upside of 1.69%. Given Phillips 66’s higher probable upside, equities analysts plainly believe Phillips 66 is more favorable than Sasol.

Profitability

This table compares Phillips 66 and Sasol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Phillips 66 1.86% 5.98% 2.81%
Sasol N/A N/A N/A

Dividends

Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 3.4%. Sasol pays an annual dividend of $0.83 per share and has a dividend yield of 3.0%. Phillips 66 pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 has increased its dividend for 5 consecutive years. Phillips 66 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

70.0% of Phillips 66 shares are owned by institutional investors. Comparatively, 2.4% of Sasol shares are owned by institutional investors. 0.5% of Phillips 66 shares are owned by company insiders. Comparatively, 1.0% of Sasol shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Phillips 66 has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, Sasol has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Valuation and Earnings

This table compares Phillips 66 and Sasol’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Phillips 66 $76.71 billion 0.56 $2.05 billion $3.22 25.65
Sasol $13.36 billion 0.01 $3.54 billion N/A N/A

Sasol has higher revenue, but lower earnings than Phillips 66.

Summary

Phillips 66 beats Sasol on 11 of the 16 factors compared between the two stocks.

Phillips 66 Company Profile

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.

Sasol Company Profile

Sasol Limited is an international integrated chemicals and energy company. The Company develops and commercializes technologies, and builds and operates facilities to produce a range of product streams, including liquid fuels, chemicals and low-carbon electricity. The Company’s operating business units include Mining and, Exploration and Production International. Its Strategic Business Units are energy, base chemicals, performance chemicals and group functions. The Company’s regional operating hubs include Southern Africa Operations and International Operations. The Company operates approximately six coal mines that supply feedstock for its Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. It offers market ready fuels and oils, such as bitumen; industrial heating fuels; naphtha and illuminating paraffin transport fuels; automotive lubricants; industrial lubricants; greases; cleansers and degreasers; automotive fuels, and burner fuels.

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