Hess (NYSE: HES) and Tesoro (NYSE:ANDV) are both large-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Risk and Volatility

Hess has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Tesoro has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hess and Tesoro’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hess $4.84 billion 3.09 -$6.13 billion ($20.20) -2.33
Tesoro $24.58 billion 0.66 $734.00 million $4.93 21.18

Tesoro has higher revenue and earnings than Hess. Hess is trading at a lower price-to-earnings ratio than Tesoro, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.7% of Hess shares are held by institutional investors. Comparatively, 79.2% of Tesoro shares are held by institutional investors. 11.8% of Hess shares are held by insiders. Comparatively, 0.9% of Tesoro shares are held by 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.

Profitability

This table compares Hess and Tesoro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hess -113.21% -9.30% -5.05%
Tesoro 2.35% 7.15% 3.11%

Dividends

Hess pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Tesoro pays an annual dividend of $2.36 per share and has a dividend yield of 2.3%. Hess pays out -5.0% of its earnings in the form of a dividend. Tesoro pays out 47.9% 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.

Analyst Ratings

This is a breakdown of recent recommendations for Hess and Tesoro, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hess 1 9 6 0 2.31
Tesoro 0 6 12 0 2.67

Hess currently has a consensus price target of $51.70, suggesting a potential upside of 9.80%. Tesoro has a consensus price target of $117.59, suggesting a potential upside of 12.60%. Given Tesoro’s stronger consensus rating and higher possible upside, analysts plainly believe Tesoro is more favorable than Hess.

Summary

Tesoro beats Hess on 10 of the 15 factors compared between the two stocks.

Hess 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.

Tesoro Company Profile

Andeavor, formerly Tesoro Corporation, is an independent petroleum refining, logistics and marketing company. he Company operates through three segments. The Refining operating segment refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas and petroleum coke for sale in bulk markets to a range of customers within its markets. The TLLP segment comprises Tesoro Logistics LP’s (TLLP) assets and operations, and includes certain crude oil and natural gas gathering assets, natural gas and natural gas liquids (NGLs) processing assets, and crude oil and refined products terminaling, and transportation. The marketing segment sells transportation fuels through branded and unbranded channels.

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