China Petroleum & Chemical Corporation (NYSE: SNP) and Valero Energy Corporation (NYSE:VLO) are both large-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of current ratings and target prices for China Petroleum & Chemical Corporation and Valero Energy Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Petroleum & Chemical Corporation 0 1 3 0 2.75
Valero Energy Corporation 0 7 9 0 2.56

Valero Energy Corporation has a consensus price target of $72.38, suggesting a potential upside of 4.09%. Given Valero Energy Corporation’s higher possible upside, analysts clearly believe Valero Energy Corporation is more favorable than China Petroleum & Chemical Corporation.

Risk and Volatility

China Petroleum & Chemical Corporation has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Valero Energy Corporation has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Earnings and Valuation

This table compares China Petroleum & Chemical Corporation and Valero Energy Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
China Petroleum & Chemical Corporation $332.03 billion 0.29 $28.88 billion $6.56 11.94
Valero Energy Corporation $79.10 billion 0.39 $4.86 billion $4.05 17.17

China Petroleum & Chemical Corporation has higher revenue and earnings than Valero Energy Corporation. China Petroleum & Chemical Corporation is trading at a lower price-to-earnings ratio than Valero Energy Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.8% of China Petroleum & Chemical Corporation shares are owned by institutional investors. Comparatively, 80.8% of Valero Energy Corporation shares are owned by institutional investors. 92.2% of China Petroleum & Chemical Corporation shares are owned by insiders. Comparatively, 0.5% of Valero Energy Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

China Petroleum & Chemical Corporation pays an annual dividend of $3.28 per share and has a dividend yield of 4.2%. Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. China Petroleum & Chemical Corporation pays out 50.0% of its earnings in the form of a dividend. Valero Energy Corporation pays out 69.1% 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. China Petroleum & Chemical Corporation has increased its dividend for 6 consecutive years. China Petroleum & Chemical Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares China Petroleum & Chemical Corporation and Valero Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Petroleum & Chemical Corporation N/A 4.47% 2.54%
Valero Energy Corporation 2.17% 8.59% 3.88%

Summary

Valero Energy Corporation beats China Petroleum & Chemical Corporation on 9 of the 17 factors compared between the two stocks.

About China Petroleum & Chemical Corporation

China Petroleum & Chemical Corporation is a China-based energy and chemical company. The Company’s segments include Exploration and Development segment, Refining segment, Marketing and Distribution segment, Chemicals segment, and Corporate and Others segment. Exploration and Development segment explores and develops oil fields, as well as produces crude oil and natural gas. Refining segment processes and purifies crude oil, which is sourced from Exploration and Development segment and external suppliers. Marketing and Distribution segment owns and operates oil depots and service stations in China. Chemical segment manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external customers.

About Valero Energy Corporation

Valero Energy Corporation (Valero) is an independent petroleum refiner and ethanol producer. The Company’s segments include refining, ethanol and Valero Energy Partners LP (VLP). The refining segment includes its refining operations and the associated marketing activities. The ethanol segment includes its ethanol operations and the associated marketing activities, and logistics assets that support its ethanol operations. The Company owns logistics assets (crude oil pipelines, refined petroleum product pipelines, terminals, tanks, marine docks, truck rack bays and other assets) that support its refining operations. Some of these assets are owned by VLP, which is a midstream master limited partnership owned by the Company. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the United States Gulf Coast and the United States Mid-Continent regions. Its refineries produce conventional gasolines, premium gasolines and lubricants, among others.

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