Chevron (CVX) vs. ConocoPhillips (COP) Critical Analysis

Chevron (NYSE: CVX) and ConocoPhillips (NYSE:COP) are both large-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Earnings and Valuation

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This table compares Chevron and ConocoPhillips’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chevron $141.72 billion 1.54 $9.20 billion $4.85 23.61
ConocoPhillips $32.58 billion 1.97 -$855.00 million ($0.50) -109.40

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

Dividends

Chevron pays an annual dividend of $4.48 per share and has a dividend yield of 3.9%. ConocoPhillips pays an annual dividend of $1.14 per share and has a dividend yield of 2.1%. Chevron pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ConocoPhillips pays out -228.0% of its earnings in the form of a dividend. ConocoPhillips has raised its dividend for 32 consecutive years.

Insider and Institutional Ownership

65.0% of Chevron shares are held by institutional investors. Comparatively, 71.1% of ConocoPhillips shares are held by institutional investors. 0.4% of Chevron shares are held by insiders. Comparatively, 0.8% of ConocoPhillips 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.

Risk and Volatility

Chevron has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Chevron and ConocoPhillips, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chevron 1 4 17 0 2.73
ConocoPhillips 0 6 14 0 2.70

Chevron presently has a consensus price target of $131.06, indicating a potential upside of 14.46%. ConocoPhillips has a consensus price target of $58.53, indicating a potential upside of 7.01%. Given Chevron’s stronger consensus rating and higher possible upside, analysts plainly believe Chevron is more favorable than ConocoPhillips.

Profitability

This table compares Chevron and ConocoPhillips’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chevron 6.49% 5.22% 3.02%
ConocoPhillips -2.04% 2.81% 1.14%

Summary

Chevron beats ConocoPhillips on 11 of the 17 factors compared between the two stocks.

About Chevron

Chevron Corporation (Chevron) manages its investments in subsidiaries and affiliates, and provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in integrated energy and chemicals operations. The Company operates through two business segments: Upstream and Downstream. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by international oil export pipelines; processing, transporting, storage and marketing of natural gas, and a gas-to-liquids plant. Downstream operations consist primarily of refining of crude oil into petroleum products; marketing of crude oil and refined products; transporting of crude oil and refined products, and manufacturing and marketing of commodity petrochemicals.

About ConocoPhillips

ConocoPhillips is an independent exploration and production company. The Company explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG) and natural gas liquids. The Company operates through five segments: Alaska, Lower 48, Canada, Europe and North Africa, Asia Pacific and Middle East, and Other International. The Alaska segment explores for, produces, transports and markets crude oil, natural gas liquids, natural gas and LNG. The Lower 48 segment consists of operations located in the United States Lower 48 states and the Gulf of Mexico. Its Canadian operations consists of oil sands developments in the Athabasca Region of northeastern Alberta. The Europe and North Africa segment consists of operations and exploration activities in Norway, the United Kingdom and Libya. The Asia Pacific and Middle East segment has exploration and production operations in China, Indonesia, Malaysia and Australia.

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