Tesoro Corporation (NYSE: ANDV) and Exxon Mobil Corporation (NYSE:XOM) are both large-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Insider and Institutional Ownership

77.5% of Tesoro Corporation shares are held by institutional investors. Comparatively, 50.7% of Exxon Mobil Corporation shares are held by institutional investors. 0.9% of Tesoro Corporation shares are held by insiders. Comparatively, 0.1% of Exxon Mobil Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Tesoro Corporation and Exxon Mobil Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tesoro Corporation 1.22% 5.24% 2.27%
Exxon Mobil Corporation 4.75% 7.62% 4.04%

Dividends

Tesoro Corporation pays an annual dividend of $2.36 per share and has a dividend yield of 2.3%. Exxon Mobil Corporation pays an annual dividend of $3.08 per share and has a dividend yield of 3.9%. Tesoro Corporation pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Exxon Mobil Corporation pays out 111.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Exxon Mobil Corporation has raised its dividend for 34 consecutive years. Exxon Mobil Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Tesoro Corporation has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Exxon Mobil Corporation has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares Tesoro Corporation and Exxon Mobil Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tesoro Corporation N/A N/A N/A $2.81 36.90
Exxon Mobil Corporation $215.29 billion 1.57 $27.62 billion $2.77 28.84

Exxon Mobil Corporation has higher revenue and earnings than Tesoro Corporation. Exxon Mobil Corporation is trading at a lower price-to-earnings ratio than Tesoro Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Tesoro Corporation and Exxon Mobil Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tesoro Corporation 0 3 14 0 2.82
Exxon Mobil Corporation 7 13 8 1 2.10

Tesoro Corporation currently has a consensus price target of $109.13, suggesting a potential upside of 5.24%. Exxon Mobil Corporation has a consensus price target of $85.02, suggesting a potential upside of 6.42%. Given Exxon Mobil Corporation’s higher probable upside, analysts plainly believe Exxon Mobil Corporation is more favorable than Tesoro Corporation.

Summary

Exxon Mobil Corporation beats Tesoro Corporation on 9 of the 16 factors compared between the two stocks.

Tesoro Corporation Company Profile

Andeavor, formerly Tesoro Corporation, is an independent petroleum refining, logistics and marketing company. he Company operates through three segments. The Refining operating segment refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas and petroleum coke for sale in bulk markets to a range of customers within its markets. The TLLP segment comprises Tesoro Logistics LP’s (TLLP) assets and operations, and includes certain crude oil and natural gas gathering assets, natural gas and natural gas liquids (NGLs) processing assets, and crude oil and refined products terminaling, and transportation. The marketing segment sells transportation fuels through branded and unbranded channels.

Exxon Mobil Corporation Company Profile

Exxon Mobil Corporation is engaged in energy business. The Company is engaged in the exploration, production, transportation and sale of crude oil and natural gas, and the manufacture, transportation and sale of petroleum products. The Company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and a range of specialty products. The Company’s segments include Upstream, Downstream, Chemical, and Corporate and Financing. The Upstream segment operates to explore for and produce crude oil and natural gas. The Downstream operates to manufacture and sell petroleum products. The Chemical segment operates to manufacture and sell petrochemicals. The Company has exploration and development activities in projects located in the United States, Canada/South America, Europe, Africa, Asia and Australia/Oceania.

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