Head-To-Head Analysis: HF Sinclair (NYSE:DINO) & Valero Energy (NYSE:VLO)

HF Sinclair (NYSE:DINO) and Valero Energy (NYSE:VLO) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Valuation & Earnings

This table compares HF Sinclair and Valero Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HF Sinclair	$28.58 billion	0.34	$177.00 million	($0.46)	-112.30
Valero Energy	$129.88 billion	0.38	$2.77 billion	$2.40	66.82

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

Dividends

HF Sinclair pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. Valero Energy pays an annual dividend of $4.52 per share and has a dividend yield of 2.8%. HF Sinclair pays out -434.8% of its earnings in the form of a dividend. Valero Energy pays out 188.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HF Sinclair has raised its dividend for 3 consecutive years and Valero Energy has raised its dividend for 4 consecutive years. HF Sinclair is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for HF Sinclair and Valero Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HF Sinclair	1	6	5	1	2.46
Valero Energy	0	6	9	2	2.76

HF Sinclair presently has a consensus target price of $55.64, indicating a potential upside of 7.70%. Valero Energy has a consensus target price of $166.07, indicating a potential upside of 3.56%. Given HF Sinclair’s higher probable upside, research analysts clearly believe HF Sinclair is more favorable than Valero Energy.

Volatility and Risk

HF Sinclair has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Valero Energy has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HF Sinclair	-0.32%	1.89%	1.06%
Valero Energy	0.62%	5.76%	2.62%

Institutional & Insider Ownership

88.3% of HF Sinclair shares are owned by institutional investors. Comparatively, 78.7% of Valero Energy shares are owned by institutional investors. 0.3% of HF Sinclair shares are owned by insiders. Comparatively, 0.0% of Valero Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Valero Energy beats HF Sinclair on 13 of the 18 factors compared between the two stocks.

About HF Sinclair

HF Sinclair Corporation operates as an independent energy company. The company produces and markets gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, specialty and modified asphalt, and others. It owns and operates refineries located in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming; and markets its refined products principally in the Southwest United States and Rocky Mountains, Pacific Northwest, and in other neighboring Plains states. In addition, the company supplies fuels to approximately 1,500 independent Sinclair branded stations and licenses the use of the Sinclair brand at approximately 300 additional locations. Further, it produces base oils and other specialized lubricants; and provides petroleum product and crude oil transportation, terminalling, storage, and throughput services to the petroleum sector. HF Sinclair Corporation is headquartered in Dallas, Texas.

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.