Head to Head Comparison: Granite Ridge Resources (NYSE:GRNT) versus Valero Energy (NYSE:VLO)

Granite Ridge Resources (NYSE:GRNT) and Valero Energy (NYSE:VLO) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Risk & Volatility

Granite Ridge Resources has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, Valero Energy has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares Granite Ridge Resources and Valero Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Ridge Resources	-5.56%	4.67%	2.33%
Valero Energy	5.17%	26.74%	11.92%

Insider & Institutional Ownership

31.6% of Granite Ridge Resources shares are held by institutional investors. Comparatively, 78.7% of Valero Energy shares are held by institutional investors. 8.6% of Granite Ridge Resources shares are held by company insiders. Comparatively, 0.4% of Valero Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 9.0%. Valero Energy pays an annual dividend of $4.80 per share and has a dividend yield of 1.2%. Granite Ridge Resources pays out -209.5% of its earnings in the form of a dividend. Valero Energy pays out 19.9% 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. Valero Energy has raised its dividend for 4 consecutive years. Granite Ridge Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Granite Ridge Resources and Valero Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Ridge Resources	$450.31 million	1.43	$24.35 million	($0.21)	-23.26
Valero Energy	$122.69 billion	0.97	$2.35 billion	$24.10	17.12

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

Analyst Ratings

This is a summary of current ratings and target prices for Granite Ridge Resources and Valero Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Ridge Resources	1	1	2	1	2.60
Valero Energy	1	7	10	2	2.65

Granite Ridge Resources presently has a consensus target price of $10.00, suggesting a potential upside of 104.71%. Valero Energy has a consensus target price of $325.69, suggesting a potential downside of 21.06%. Given Granite Ridge Resources’ higher probable upside, equities research analysts plainly believe Granite Ridge Resources is more favorable than Valero Energy.

Summary

Valero Energy beats Granite Ridge Resources on 13 of the 18 factors compared between the two stocks.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based 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.