BP (NYSE: BP) and HollyFrontier (NYSE:HFC) are both large-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.
BP pays an annual dividend of $2.38 per share and has a dividend yield of 5.1%. HollyFrontier pays an annual dividend of $1.32 per share and has a dividend yield of 1.8%. BP pays out 126.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HollyFrontier pays out 56.9% of its earnings in the form of a dividend.
Volatility and Risk
BP has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, HollyFrontier has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.
Insider and Institutional Ownership
10.3% of BP shares are held by institutional investors. Comparatively, 83.8% of HollyFrontier shares are held by institutional investors. 1.0% of BP shares are held by company insiders. Comparatively, 0.6% of HollyFrontier shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings for BP and HollyFrontier, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BP currently has a consensus target price of $43.75, indicating a potential downside of 5.79%. HollyFrontier has a consensus target price of $55.81, indicating a potential downside of 23.50%. Given BP’s stronger consensus rating and higher possible upside, equities analysts plainly believe BP is more favorable than HollyFrontier.
This table compares BP and HollyFrontier’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares BP and HollyFrontier’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BP||$244.58 billion||0.63||$3.39 billion||$1.88||24.70|
|HollyFrontier||$14.25 billion||0.90||$805.39 million||$2.32||31.45|
BP has higher revenue and earnings than HollyFrontier. BP is trading at a lower price-to-earnings ratio than HollyFrontier, indicating that it is currently the more affordable of the two stocks.
HollyFrontier beats BP on 9 of the 15 factors compared between the two stocks.
BP Company Profile
BP p.l.c. engages in energy business worldwide. It operates through three segments: Upstream, Downstream, and Rosneft. The Upstream segment is involved in the oil and natural gas exploration, field development, and production; midstream transportation, storage, and processing; and marketing and trading of liquefied natural gas (LNG), biogas, power and natural gas liquids (NGLs). This segment also engages in the ownership and management of crude oil and natural gas pipelines; processing facilities and export terminals; and LNG processing facilities and transportation, as well as in NGLs processing business. The Downstream segment refines, manufactures, markets, transports, supplies, and trades in crude oil, petroleum, and petrochemical products and related services to wholesale and retail customers. It offers gasoline, diesel, and aviation fuel; lubricants, and related products and services to the automotive, industrial, marine, and energy markets under the Castrol, BP, and Aral brands; and petrochemical products, such as purified terephthalic acid, paraxylene, acetic acid, olefins and derivatives, and specialty petrochemical products. The Rosneft segment engages in the exploration and production of hydrocarbons, as well as jet fuel, bunkering, bitumen, and lubricants activities. This segment also owns and operates 13 refineries in Russia; and approximately 2,960 retail service stations in Russia and internationally. The company also produces ethanol, bio-isobutanol, bio-power, and solar energy; transports hydrocarbon products through time-chartered and spot-chartered vessels; and holds interests in 14 onshore wind sites with a generation capacity of 1,432 megawatts through wind. BP p.l.c. was founded in 1889 and is headquartered in London, the United Kingdom.
HollyFrontier Company Profile
HollyFrontier Corporation operates as an independent petroleum refiner in the United States. The company operates through three segments: Refining, Lubricants and Specialty Products, and HEP. It primarily produces high-value light products, such as gasoline, diesel and jet fuel, and specialty lubricant products, as well as specialty and modified asphalt. The company offers its products to other refiners, convenience store chains, independent marketers, retailers, truck stop chains, wholesalers, railroads, governmental entities, paving contractors or manufacturers, and commercial and specialty markets, as well as for commercial airline use. It owns and operates 5 refineries with a combined crude oil processing capacity of approximately 457,000 barrels per day in El Dorado, Kansas; Tulsa, Oklahoma; Artesia, New Mexico; Cheyenne, Wyoming; and Woods Cross, Utah. The company also owns and operates vacuum distillation and other facilities in Lovington, New Mexico, as well as asphalt terminals in Arizona, New Mexico, and Oklahoma. Its refineries serve markets in the Mid-Continent, Southwest, and Rocky Mountain regions of the United States. In addition, HollyFrontier Corporation produces base oils and other specialized lubricant products; and owns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities, and refinery processing units. The company was formerly known as Holly Corporation and changed its name to HollyFrontier Corporation as a result of its merger with Frontier Oil Corporation in July 2011. HollyFrontier Corporation was founded in 1947 and is headquartered in Dallas, Texas.
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