Valero Energy Corporation (NYSE: VLO) and Exxon Mobil Corporation (NYSE:XOM) are both large-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 3.5%. Exxon Mobil Corporation pays an annual dividend of $3.08 per share and has a dividend yield of 3.7%. Valero Energy Corporation pays out 60.5% of its earnings in the form of a dividend. Exxon Mobil Corporation pays out 100.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Valero Energy Corporation has raised its dividend for 6 consecutive years and 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.
Insider & Institutional Ownership
80.8% of Valero Energy Corporation shares are held by institutional investors. Comparatively, 50.8% of Exxon Mobil Corporation shares are held by institutional investors. 0.5% of Valero Energy Corporation shares are held by company insiders. Comparatively, 0.1% of Exxon Mobil Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Valero Energy Corporation and Exxon Mobil Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Valero Energy Corporation||$75.66 billion||0.47||$2.29 billion||$4.63||17.42|
|Exxon Mobil Corporation||$226.09 billion||1.55||$7.84 billion||$3.07||27.00|
Exxon Mobil Corporation has higher revenue and earnings than Valero Energy Corporation. Valero Energy Corporation is trading at a lower price-to-earnings ratio than Exxon Mobil Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Valero Energy Corporation and Exxon Mobil Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Corporation||2.33%||9.87%||4.43%|
|Exxon Mobil Corporation||5.14%||8.21%||4.40%|
Risk and Volatility
Valero Energy Corporation has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Exxon Mobil Corporation has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.
This is a summary of recent ratings for Valero Energy Corporation and Exxon Mobil Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Corporation||0||10||10||0||2.50|
|Exxon Mobil Corporation||6||12||8||1||2.15|
Valero Energy Corporation currently has a consensus target price of $76.73, indicating a potential downside of 4.88%. Exxon Mobil Corporation has a consensus target price of $85.68, indicating a potential upside of 3.37%. Given Exxon Mobil Corporation’s higher probable upside, analysts plainly believe Exxon Mobil Corporation is more favorable than Valero Energy Corporation.
Valero Energy Corporation Company Profile
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.
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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