Valero Energy (NYSE:VLO – Get Free Report) and Granite Ridge Resources (NYSE:GRNT – Get Free Report) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.
Analyst Ratings
This is a breakdown of current ratings and target prices for Valero Energy and Granite Ridge Resources, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Valero Energy | 1 | 8 | 9 | 2 | 2.60 |
| Granite Ridge Resources | 1 | 1 | 2 | 1 | 2.60 |
Valero Energy currently has a consensus price target of $335.12, suggesting a potential downside of 13.37%. Granite Ridge Resources has a consensus price target of $10.00, suggesting a potential upside of 124.97%. Given Granite Ridge Resources’ higher possible upside, analysts plainly believe Granite Ridge Resources is more favorable than Valero Energy.
Volatility & Risk
Profitability
This table compares Valero Energy and Granite Ridge Resources’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Valero Energy | 5.17% | 26.74% | 11.92% |
| Granite Ridge Resources | -5.56% | 4.67% | 2.33% |
Insider & Institutional Ownership
78.7% of Valero Energy shares are owned by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are owned by institutional investors. 0.4% of Valero Energy shares are owned by company insiders. Comparatively, 8.6% of Granite Ridge Resources shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Valero Energy pays an annual dividend of $4.80 per share and has a dividend yield of 1.2%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 9.9%. Valero Energy pays out 19.9% of its earnings in the form of a dividend. Granite Ridge Resources pays out -209.5% 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. Valero Energy has raised its dividend for 4 consecutive years. Granite Ridge Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Valero Energy and Granite Ridge Resources”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Valero Energy | $122.69 billion | 0.91 | $2.35 billion | $24.10 | 16.05 |
| Granite Ridge Resources | $450.31 million | 1.30 | $24.35 million | ($0.21) | -21.17 |
Valero Energy has higher revenue and earnings than Granite Ridge Resources. Granite Ridge Resources is trading at a lower price-to-earnings ratio than Valero Energy, indicating that it is currently the more affordable of the two stocks.
Summary
Valero Energy beats Granite Ridge Resources on 12 of the 17 factors compared between the two stocks.
About Valero Energy
Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending and Conventional Blendstock for Oxygenate Blending gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company owns and operates renewable diesel and ethanol plants, as well as produces renewable diesel and naphtha under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distiller grains, syrup, and inedible distillers corn oil to animal feed customers. 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 1980 and is headquartered in San Antonio, Texas.
About Granite Ridge Resources
Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.
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