Contrasting Alon USA Energy (ALJ) & SINOPEC Shangai Petrochemical (SHI)
Alon USA Energy (NYSE: ALJ) and SINOPEC Shangai Petrochemical (NYSE:SHI) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
Volatility & Risk
Alon USA Energy has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, SINOPEC Shangai Petrochemical has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.
This table compares Alon USA Energy and SINOPEC Shangai Petrochemical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Energy||0.89%||5.65%||1.96%|
|SINOPEC Shangai Petrochemical||8.79%||27.54%||20.37%|
Earnings & Valuation
This table compares Alon USA Energy and SINOPEC Shangai Petrochemical’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Energy||N/A||N/A||N/A||($0.56)||-23.79|
|SINOPEC Shangai Petrochemical||$12.49 billion||0.51||$1.41 billion||$9.28||6.33|
SINOPEC Shangai Petrochemical has higher revenue and earnings than Alon USA Energy. Alon USA Energy is trading at a lower price-to-earnings ratio than SINOPEC Shangai Petrochemical, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Alon USA Energy and SINOPEC Shangai Petrochemical, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Energy||0||3||1||0||2.25|
|SINOPEC Shangai Petrochemical||1||2||0||0||1.67|
Alon USA Energy currently has a consensus target price of $11.38, indicating a potential downside of 14.60%. Given Alon USA Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Alon USA Energy is more favorable than SINOPEC Shangai Petrochemical.
Alon USA Energy pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. SINOPEC Shangai Petrochemical pays an annual dividend of $3.26 per share and has a dividend yield of 5.5%. Alon USA Energy pays out -107.1% of its earnings in the form of a dividend. SINOPEC Shangai Petrochemical pays out 35.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Alon USA Energy has raised its dividend for 4 consecutive years.
Insider and Institutional Ownership
49.5% of Alon USA Energy shares are held by institutional investors. Comparatively, 1.0% of SINOPEC Shangai Petrochemical shares are held by institutional investors. 8.8% of Alon USA Energy shares are held by company insiders. Comparatively, 1.0% of SINOPEC Shangai Petrochemical shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Alon USA Energy beats SINOPEC Shangai Petrochemical on 8 of the 14 factors compared between the two stocks.
About Alon USA Energy
Alon USA Energy, Inc. is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company’s segments include refining and marketing, asphalt and retail. Its refineries produce petroleum products, including various grades of gasoline, diesel, jet fuel, petrochemicals, petrochemical feedstocks, asphalt, and other petroleum-based products. As of December 31, 2016, it held interests in Alon USA Partners, LP, which owned a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day and an integrated wholesale marketing business. In addition, it owned a crude oil refinery in Krotz Springs, Louisiana, with a crude oil throughput capacity of approximately 74,000 barrels per day (bpd), as of December 31, 2016. The Company also owns crude oil refineries in California. As of December 31, 2016, it operated approximately 300 convenience stores.
About SINOPEC Shangai Petrochemical
Sinopec Shanghai Petrochemical Company Limited (Shanghai Petrochemical) is a petrochemical company. The Company and its subsidiaries are principally engaged in processing crude oil into synthetic fibers, resins and plastics, intermediate petrochemicals and petroleum products. The Company operates in five operating segments. The synthetic fibres segment produces polyester and acrylic fibers, which are used in the textile and apparel industries. The resins and plastics segment produces polyester chips, polyethylene resins and films, polypropylene resins and polyvinyl alcohol (PVA) granules. The intermediate petrochemicals segment produces p-xylene, benzene and ethylene oxide. The petroleum products segment is equipped with crude oil distillation facilities used to produce vacuum and atmospheric gas oils used as feedstock of the Company’s downstream processing facilities. The trading of petrochemical products segment is engaged in importing and exporting of petrochemical products.
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