Financial Analysis: CVR Energy (CVI) versus SINOPEC Shangai Petrochemical (SHI)
SINOPEC Shangai Petrochemical (NYSE: SHI) and CVR Energy (NYSE:CVI) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.
This table compares SINOPEC Shangai Petrochemical and CVR Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SINOPEC Shangai Petrochemical||8.79%||27.54%||20.37%|
Earnings and Valuation
This table compares SINOPEC Shangai Petrochemical and CVR Energy’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SINOPEC Shangai Petrochemical||$12.49 billion||0.51||$1.41 billion||$9.28||6.35|
|CVR Energy||$5.54 billion||0.27||$313.00 million||$0.28||61.36|
SINOPEC Shangai Petrochemical has higher revenue and earnings than CVR Energy. SINOPEC Shangai Petrochemical is trading at a lower price-to-earnings ratio than CVR Energy, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for SINOPEC Shangai Petrochemical and CVR Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SINOPEC Shangai Petrochemical||1||2||0||0||1.67|
CVR Energy has a consensus price target of $14.50, suggesting a potential downside of 15.60%. Given CVR Energy’s stronger consensus rating and higher possible upside, analysts clearly believe CVR Energy is more favorable than SINOPEC Shangai Petrochemical.
Institutional and Insider Ownership
1.0% of SINOPEC Shangai Petrochemical shares are owned by institutional investors. Comparatively, 98.5% of CVR Energy shares are owned by institutional investors. 1.0% of SINOPEC Shangai Petrochemical shares are owned by company insiders. Comparatively, 82.0% of CVR Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
SINOPEC Shangai Petrochemical has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, CVR Energy has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.
SINOPEC Shangai Petrochemical pays an annual dividend of $3.26 per share and has a dividend yield of 5.5%. CVR Energy pays an annual dividend of $2.00 per share and has a dividend yield of 11.6%. SINOPEC Shangai Petrochemical pays out 35.1% of its earnings in the form of a dividend. CVR Energy pays out 714.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
SINOPEC Shangai Petrochemical beats CVR Energy on 8 of the 15 factors compared between the two stocks.
About SINOPEC Shangai Petrochemical
Sinopec Shanghai Petrochemical Company Limited (Shanghai Petrochemical) is a petrochemical company. The Company and its subsidiaries are principally engaged in processing crude oil into synthetic fibers, resins and plastics, intermediate petrochemicals and petroleum products. The Company operates in five operating segments. The synthetic fibres segment produces polyester and acrylic fibers, which are used in the textile and apparel industries. The resins and plastics segment produces polyester chips, polyethylene resins and films, polypropylene resins and polyvinyl alcohol (PVA) granules. The intermediate petrochemicals segment produces p-xylene, benzene and ethylene oxide. The petroleum products segment is equipped with crude oil distillation facilities used to produce vacuum and atmospheric gas oils used as feedstock of the Company’s downstream processing facilities. The trading of petrochemical products segment is engaged in importing and exporting of petrochemical products.
About CVR Energy
CVR Energy, Inc. (CVR Energy) is a holding company. The Company is engaged in the petroleum refining and nitrogen fertilizer manufacturing through its holdings in CVR Refining LP (CVR Refining or the Refining Partnership) and CVR Partners LP (CVR Partners or the Nitrogen Fertilizer Partnership). It operates under two business segments: petroleum (the petroleum and related businesses operated by the Refining Partnership) and nitrogen fertilizer (the nitrogen fertilizer business operated by the Nitrogen Fertilizer Partnership). The Company’s Refining Partnership is an independent petroleum refiner and marketer of transportation fuels. Its Nitrogen Fertilizer Partnership produces and markets nitrogen fertilizers in the form of urea and ammonium nitrate (UAN) and ammonia. The petroleum business consists of a coking medium-sour crude oil refinery in Coffeyville, Kansas and a crude oil refinery in Wynnewood, Oklahoma.
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