OPAL Fuels (NASDAQ:OPAL – Get Free Report) and Valero Energy (NYSE:VLO – Get Free Report) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.
Profitability
This table compares OPAL Fuels and Valero Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| OPAL Fuels | 0.65% | 15.54% | 0.22% |
| Valero Energy | 5.17% | 26.74% | 11.92% |
Earnings and Valuation
This table compares OPAL Fuels and Valero Energy”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| OPAL Fuels | $348.98 million | 0.88 | $14.75 million | ($0.01) | -175.00 |
| Valero Energy | $122.69 billion | 0.93 | $2.35 billion | $24.10 | 16.53 |
Valero Energy has higher revenue and earnings than OPAL Fuels. OPAL Fuels 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 Recommendations
This is a breakdown of current ratings for OPAL Fuels and Valero Energy, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| OPAL Fuels | 2 | 1 | 0 | 0 | 1.33 |
| Valero Energy | 1 | 8 | 9 | 2 | 2.60 |
OPAL Fuels presently has a consensus target price of $2.40, indicating a potential upside of 37.14%. Valero Energy has a consensus target price of $335.12, indicating a potential downside of 15.86%. Given OPAL Fuels’ higher possible upside, equities research analysts clearly believe OPAL Fuels is more favorable than Valero Energy.
Volatility & Risk
OPAL Fuels has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Valero Energy has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.
Institutional and Insider Ownership
12.2% of OPAL Fuels shares are held by institutional investors. Comparatively, 78.7% of Valero Energy shares are held by institutional investors. 85.7% of OPAL Fuels shares are held by insiders. Comparatively, 0.4% of Valero Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
Valero Energy beats OPAL Fuels on 12 of the 15 factors compared between the two stocks.
About OPAL Fuels
OPAL Fuels Inc., together with its subsidiaries, engages in the production and distribution of renewable natural gas for use as a vehicle fuel for heavy and medium-duty trucking fleets. It also designs, develops, constructs, operates, and services fueling stations for trucking fleets that use natural gas to displace diesel as transportation fuel. In addition, it offers design, development, and construction services for hydrogen fueling stations. Further, the company engages in the generation and sale of renewable power to utilities. OPAL Fuels Inc. is based in White Plains, New York.
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.
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