Head to Head Contrast: Statoil (STO) vs. Valero Energy (VLO)

Statoil (NYSE: STO) and Valero Energy (NYSE:VLO) are both large-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Earnings and Valuation

This table compares Statoil and Valero Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Statoil $61.19 billion 1.47 $4.59 billion $1.38 19.67
Valero Energy $93.98 billion 0.50 $4.07 billion $4.96 21.90

Statoil has higher earnings, but lower revenue than Valero Energy. Statoil is trading at a lower price-to-earnings ratio than Valero Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Statoil and Valero Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil 3 10 2 0 1.93
Valero Energy 0 12 11 0 2.48

Statoil presently has a consensus target price of $21.50, indicating a potential downside of 20.78%. Valero Energy has a consensus target price of $110.00, indicating a potential upside of 1.27%. Given Valero Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Valero Energy is more favorable than Statoil.

Institutional & Insider Ownership

5.0% of Statoil shares are owned by institutional investors. Comparatively, 77.7% of Valero Energy shares are owned by institutional investors. 0.4% of Valero Energy shares are owned 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 Statoil and Valero Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil 7.34% 12.32% 4.36%
Valero Energy 4.29% 10.61% 4.81%

Volatility and Risk

Statoil has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Valero Energy has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Dividends

Statoil pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Valero Energy pays an annual dividend of $3.20 per share and has a dividend yield of 2.9%. Statoil pays out 23.2% of its earnings in the form of a dividend. Valero Energy pays out 64.5% 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. Statoil has raised its dividend for 5 consecutive years and Valero Energy has raised its dividend for 7 consecutive years. Valero Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Valero Energy beats Statoil on 12 of the 17 factors compared between the two stocks.

About Statoil

Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development & Production Norway; Development & Production USA; Development & Production International; Marketing, Midstream & Processing; New Energy Solutions; Technology, Projects & Drilling; Exploration; and Global Strategy & Business Development segments. It also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas; markets and trades electricity and emission rights; and operates refineries, processing and power plants, and terminals. In addition, the company develops wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2017, it had proved oil and gas reserves of 5,367 million barrels of oil equivalent. The company was formerly known as StatoilHydro ASA and changed its name to Statoil ASA in November 2009. Statoil ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About Valero Energy

Valero Energy Corporation operates as an independent petroleum refining and ethanol producing company. It operates through three segments: Refining, Ethanol, and VLP (Valero Energy Partners LP). The company is involved in oil and gas refining, marketing, and bulk selling activities. It produces conventional and premium gasolines, gasoline meeting the specifications of the California Air Resources Board (CARB), diesel fuels, low-sulfur and ultra-low-sulfur diesel fuels, CARB diesel, other distillates, jet fuels, asphalts, petrochemicals, lubricants, and other refined petroleum products. As of December 31, 2017, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.1 million barrels per day. It markets its refined products through wholesale rack and bulk markets; and through approximately 7,400 outlets under the Valero, Diamond Shamrock, Shamrock, Ultramar, Beacon, and Texaco brand names. The company also produces and sells ethanol, distiller grains, and corn oil primarily to refiners and gasoline blenders, as well as to animal feed customers. It owns and operates 11 ethanol plants with a combined ethanol production capacity of approximately 1.45 billion gallons per year. In addition, the company owns, operates, develops, and acquires crude oil, refined petroleum products pipelines, terminals, and other transportation and logistics assets; and provides transportation and terminaling services. Valero Energy Corporation has operations in the United States, Canada, the United Kingdom, Ireland, and internationally. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1955 and is headquartered in San Antonio, Texas.

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