Phillips 66 (NYSE:PSX – Get Free Report) and Murphy Oil (NYSE:MUR – Get Free Report) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.
Risk and Volatility
Phillips 66 has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Murphy Oil has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.
Dividends
Phillips 66 pays an annual dividend of $5.08 per share and has a dividend yield of 1.7%. Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 3.2%. Phillips 66 pays out 28.9% of its earnings in the form of a dividend. Murphy Oil pays out 69.3% 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. Phillips 66 has raised its dividend for 14 consecutive years and Murphy Oil has raised its dividend for 5 consecutive years.
Analyst Recommendations
This is a summary of current ratings for Phillips 66 and Murphy Oil, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Phillips 66 | 0 | 7 | 11 | 2 | 2.75 |
| Murphy Oil | 2 | 9 | 4 | 0 | 2.13 |
Phillips 66 presently has a consensus target price of $269.06, suggesting a potential downside of 7.73%. Murphy Oil has a consensus target price of $38.92, suggesting a potential downside of 10.16%. Given Phillips 66’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Phillips 66 is more favorable than Murphy Oil.
Earnings & Valuation
This table compares Phillips 66 and Murphy Oil”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Phillips 66 | $136.56 billion | 0.85 | $4.40 billion | $17.55 | 16.62 |
| Murphy Oil | $2.72 billion | 2.28 | $104.23 million | $2.02 | 21.44 |
Phillips 66 has higher revenue and earnings than Murphy Oil. Phillips 66 is trading at a lower price-to-earnings ratio than Murphy Oil, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
76.9% of Phillips 66 shares are owned by institutional investors. Comparatively, 78.3% of Murphy Oil shares are owned by institutional investors. 0.4% of Phillips 66 shares are owned by company insiders. Comparatively, 5.8% of Murphy Oil shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Phillips 66 and Murphy Oil’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Phillips 66 | 4.54% | 19.93% | 7.62% |
| Murphy Oil | 9.74% | 6.63% | 3.51% |
Summary
Phillips 66 beats Murphy Oil on 12 of the 18 factors compared between the two stocks.
About Phillips 66
Phillips 66 operates as an energy manufacturing and logistics company in the United States, the United Kingdom, Germany, and internationally. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels. This segment also manufactures and markets specialty products, such as base oils and lubricants. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.
About Murphy Oil
Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.
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