Critical Review: Hess Corporation (HES) and Suncor Energy (SU)
Hess Corporation (NYSE: HES) and Suncor Energy (NYSE:SU) are both large-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
Volatility & Risk
Hess Corporation has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, Suncor Energy has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.
Insider and Institutional Ownership
86.7% of Hess Corporation shares are held by institutional investors. Comparatively, 64.0% of Suncor Energy shares are held by institutional investors. 11.8% of Hess Corporation shares are held by company insiders. Comparatively, 1.0% of Suncor Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Hess Corporation and Suncor Energy ‘s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hess Corporation||$4.94 billion||2.93||$1.45 billion||($19.30)||-2.38|
|Suncor Energy||$24.94 billion||2.24||$7.59 billion||$1.22||27.66|
Suncor Energy has higher revenue and earnings than Hess Corporation. Hess Corporation is trading at a lower price-to-earnings ratio than Suncor Energy , indicating that it is currently the more affordable of the two stocks.
Hess Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Suncor Energy pays an annual dividend of $1.03 per share and has a dividend yield of 3.1%. Hess Corporation pays out -5.2% of its earnings in the form of a dividend. Suncor Energy pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Hess Corporation and Suncor Energy ‘s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings for Hess Corporation and Suncor Energy , as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hess Corporation currently has a consensus target price of $51.85, indicating a potential upside of 12.81%. Suncor Energy has a consensus target price of $44.36, indicating a potential upside of 31.47%. Given Suncor Energy ‘s stronger consensus rating and higher probable upside, analysts plainly believe Suncor Energy is more favorable than Hess Corporation.
Suncor Energy beats Hess Corporation on 11 of the 16 factors compared between the two stocks.
Hess Corporation Company Profile
Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company’s segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, Equatorial Guinea, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.
Suncor Energy Company Profile
Suncor Energy Inc. (Suncor) is an integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production (E&P), and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its E&P segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Marketing operations. In addition, it explores for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. It transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. It markets third-party petroleum products. Suncor also conducts energy trading activities.
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