Critical Analysis: BKV (NYSE:BKV) vs. Sunoco (NYSE:SUN)

Sunoco (NYSE:SUN) and BKV (NYSE:BKV) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Profitability

This table compares Sunoco and BKV’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunoco	2.88%	18.78%	4.29%
BKV	17.73%	6.67%	3.73%

Risk and Volatility

Sunoco has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, BKV has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Sunoco and BKV, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunoco	0	1	8	1	3.00
BKV	0	1	8	2	3.09

Sunoco currently has a consensus target price of $79.75, suggesting a potential upside of 8.65%. BKV has a consensus target price of $33.67, suggesting a potential upside of 46.24%. Given BKV’s stronger consensus rating and higher probable upside, analysts clearly believe BKV is more favorable than Sunoco.

Valuation & Earnings

This table compares Sunoco and BKV”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunoco	$25.20 billion	0.60	$527.00 million	$4.52	16.24
BKV	$1.01 billion	2.50	$179.16 million	$2.74	8.40

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

Institutional & Insider Ownership

24.3% of Sunoco shares are held by institutional investors. 2.5% of BKV shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

About Sunoco

Sunoco LP, together with its subsidiaries, distributes and retails motor fuels in the United States. It operates through two segments: Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel, as well as other petroleum products, such as propane and lubricating oil from independent refiners and oil companies and supplies it to company-operated retail stores, independently operated commission agents, and retail stores, as well as other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities, and other industrial customers. It owns and operates retail stores under the APlus and Aloha Island Mart brand names; and offers food, beverages, snacks, grocery and non-food merchandise, motor fuels, and other services. The All Other segment includes partnership credit card services, franchise royalties, and retail operations; and offers credit card processing, car washes, lottery, automated teller machines, money order, prepaid phone cards, and wireless services. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in 2014. Sunoco LP was founded in 1886 and is headquartered in Dallas, Texas.

About BKV

BKV Corporation engages in the acquisition, operation, and development of natural gas and NGL properties. It is also involved in the gathering, processing, and transportation of natural gas. The company was founded in 2015 and is based in Denver, Colorado with additional offices in Tunkhannock, Pennsylvania and Fort Worth, Texas. BKV Corporation, LLC operates as a subsidiary of Banpu North America Corporation.