Financial Contrast: Statoil (STO) vs. Phillips 66 (PSX)

Statoil (NYSE: PSX) and Phillips 66 (NYSE:PSX) are both large-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Earnings and Valuation

This table compares Statoil and Phillips 66’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Statoil $61.19 billion 1.47 $4.59 billion $1.38 19.67
Phillips 66 $104.62 billion 0.50 $5.11 billion $4.38 25.49

Phillips 66 has higher revenue and earnings than Statoil. Statoil is trading at a lower price-to-earnings ratio than Phillips 66, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Statoil and Phillips 66’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil 7.34% 12.32% 4.36%
Phillips 66 5.34% 12.87% 6.05%

Dividends

Statoil pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Phillips 66 pays an annual dividend of $3.20 per share and has a dividend yield of 2.9%. Statoil pays out 23.2% of its earnings in the form of a dividend. Phillips 66 pays out 73.1% 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. Statoil has increased its dividend for 5 consecutive years and Phillips 66 has increased its dividend for 6 consecutive years. Phillips 66 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Statoil and Phillips 66, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil 2 8 2 0 2.00
Phillips 66 2 9 7 0 2.28

Statoil currently has a consensus price target of $21.50, suggesting a potential downside of 20.78%. Phillips 66 has a consensus price target of $114.01, suggesting a potential upside of 2.10%. Given Phillips 66’s stronger consensus rating and higher probable upside, analysts clearly believe Phillips 66 is more favorable than Statoil.

Risk & Volatility

Statoil has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Phillips 66 has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

5.0% of Statoil shares are held by institutional investors. Comparatively, 69.4% of Phillips 66 shares are held by institutional investors. 0.6% of Phillips 66 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Phillips 66 beats Statoil on 14 of the 17 factors compared between the two stocks.

About Statoil

Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development & Production Norway; Development & Production USA; Development & Production International; Marketing, Midstream & Processing; New Energy Solutions; Technology, Projects & Drilling; Exploration; and Global Strategy & Business Development segments. It also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas; markets and trades electricity and emission rights; and operates refineries, processing and power plants, and terminals. In addition, the company develops wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2017, it had proved oil and gas reserves of 5,367 million barrels of oil equivalent. The company was formerly known as StatoilHydro ASA and changed its name to Statoil ASA in November 2009. Statoil ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About Phillips 66

Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks, delivers refined products to market, and provides terminaling and storage services for crude oil and petroleum products; transports, stores, fractionates, and markets natural gas liquids, exports LPG, and provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment manufactures and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, drilling chemicals, and mining chemicals. The Refining segment buys, sells, and refines crude oil and other feedstocks into petroleum products comprising gasolines, distillates, and aviation fuels at 13 refineries primarily in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products consisting of gasolines, distillates, and aviation fuels primarily in the United States and Europe. It also manufactures and sells specialty products, such as petroleum coke products, waxes, solvents, and polypropylene. In addition, this segment generates electricity and provides merchant power into the Texas market. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.

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