Valero Energy Corporation (NYSE: VLO) and Sasol (NYSE:SSL) are both large-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Dividends

Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. Sasol pays an annual dividend of $1.29 per share and has a dividend yield of 4.2%. Valero Energy Corporation pays out 69.1% of its earnings in the form of a dividend. Sasol has increased its dividend for 6 consecutive years. Sasol is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Valero Energy Corporation has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Sasol has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Earnings & Valuation

This table compares Valero Energy Corporation and Sasol’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Valero Energy Corporation $79.10 billion 0.39 $4.86 billion $4.05 17.27
Sasol $13.17 billion 1.49 $3.88 billion N/A N/A

Valero Energy Corporation has higher revenue and earnings than Sasol.

Profitability

This table compares Valero Energy Corporation and Sasol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valero Energy Corporation 2.17% 8.59% 3.88%
Sasol N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Valero Energy Corporation and Sasol, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valero Energy Corporation 0 7 9 0 2.56
Sasol 0 1 3 0 2.75

Valero Energy Corporation presently has a consensus price target of $72.38, indicating a potential upside of 3.51%. Given Valero Energy Corporation’s higher possible upside, analysts clearly believe Valero Energy Corporation is more favorable than Sasol.

Insider & Institutional Ownership

80.8% of Valero Energy Corporation shares are held by institutional investors. Comparatively, 1.8% of Sasol shares are held by institutional investors. 0.5% of Valero Energy Corporation shares are held by company insiders. Comparatively, 1.0% of Sasol shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Valero Energy Corporation beats Sasol on 9 of the 15 factors compared between the two stocks.

About Valero Energy Corporation

Valero Energy Corporation (Valero) is an independent petroleum refiner and ethanol producer. The Company’s segments include refining, ethanol and Valero Energy Partners LP (VLP). The refining segment includes its refining operations and the associated marketing activities. The ethanol segment includes its ethanol operations and the associated marketing activities, and logistics assets that support its ethanol operations. The Company owns logistics assets (crude oil pipelines, refined petroleum product pipelines, terminals, tanks, marine docks, truck rack bays and other assets) that support its refining operations. Some of these assets are owned by VLP, which is a midstream master limited partnership owned by the Company. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the United States Gulf Coast and the United States Mid-Continent regions. Its refineries produce conventional gasolines, premium gasolines and lubricants, among others.

About Sasol

Sasol Limited is an international integrated chemicals and energy company. The Company develops and commercializes technologies, and builds and operates facilities to produce a range of product streams, including liquid fuels, chemicals and low-carbon electricity. The Company’s operating business units include Mining and, Exploration and Production International. Its Strategic Business Units are energy, base chemicals, performance chemicals and group functions. The Company’s regional operating hubs include Southern Africa Operations and International Operations. The Company operates approximately six coal mines that supply feedstock for its Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. It offers market ready fuels and oils, such as bitumen; industrial heating fuels; naphtha and illuminating paraffin transport fuels; automotive lubricants; industrial lubricants; greases; cleansers and degreasers; automotive fuels, and burner fuels.

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