Financial Comparison: Galp Energia SGPS (OTCMKTS:GLPEY) versus Calumet (NASDAQ:CLMT)

Calumet (NASDAQ:CLMT) and Galp Energia SGPS (OTCMKTS:GLPEY) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Institutional and Insider Ownership

34.4% of Calumet shares are owned by institutional investors. 3.2% of Calumet shares are owned 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Calumet and Galp Energia SGPS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Calumet	1	4	2	0	2.14
Galp Energia SGPS	0	5	3	1	2.56

Calumet presently has a consensus price target of $54.75, indicating a potential upside of 51.83%. Given Calumet’s higher probable upside, equities analysts plainly believe Calumet is more favorable than Galp Energia SGPS.

Earnings and Valuation

This table compares Calumet and Galp Energia SGPS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Calumet	$4.59 billion	0.69	-$33.80 million	($2.25)	-16.03
Galp Energia SGPS	$22.89 billion	0.63	$1.27 billion	$0.81	13.04

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

Dividends

Calumet pays an annual dividend of $2.74 per share and has a dividend yield of 7.6%. Galp Energia SGPS pays an annual dividend of $0.18 per share and has a dividend yield of 1.7%. Calumet pays out -121.8% of its earnings in the form of a dividend. Galp Energia SGPS pays out 22.2% 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. Calumet is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Calumet has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Galp Energia SGPS has a beta of 0.07, indicating that its share price is 93% less volatile than the S&P 500.

Profitability

This table compares Calumet and Galp Energia SGPS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Calumet	-2.98%	N/A	-4.24%
Galp Energia SGPS	4.55%	28.78%	9.53%

Summary

Galp Energia SGPS beats Calumet on 10 of the 17 factors compared between the two stocks.

About Calumet

Calumet, Inc. engages in the manufacturing, formulating, and marketing of a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. It operates through the following segments: Specialty Products & Solutions, Performance Brands, Montana/Renewables, and Corporate. The Specialty Products & Solutions segment consists of customer-focused solutions and formulations businesses, covering multiple specialty product lines, anchored by a unique integrated complex in Northwest Louisiana. The Performance Brands segment includes a fast-growing portfolio of high-quality, high performing brands. The Montana/Renewables segment is composed of a Great Falls specialty asphalt facility and Montana Renewables facility. The Corporate segment focuses on the general and administrative expenses not allocated to the Montana/Renewables, Specialty Products and Solutions, or Performance Brands segments. The company was founded in 1919 and is headquartered in Indianapolis, IN.

About Galp Energia SGPS

Galp Energia, SGPS, S.A. operates as an integrated energy operator in Portugal and internationally. The company operates through four segments: Upstream, Industrial & Midstream, Commercial, and Renewables and New Business. The Upstream segment engages in the exploration, development, and production of hydrocarbons primarily in Brazil, Mozambique, Namibia, and Angola. The Industrial & Midstream segment owns refineries in Portugal, as well as is involved in activities related to energy management of oil products, gas, and electricity. This segment provides storage and transportation infrastructure for oil and gas products, as well as engages in the sale of electricity to the grid in Portugal and Spain. The Commercial segment is involved in the areas of retail to final business-to-business and business to consumer customers of oil, gas, and electricity. The Renewables and New Business segment is involved in the development of solar and wind power generation projects in Portugal and Spain. In addition, it produces lithium-ion batteries, hydrogen, and biofuels; and operates service stations. Further, the company engages in the reinsurance business. The company was formerly known as Galp Petróleos e Gás de Portugal, SGPS, S.A. and changed its name to Galp Energia, SGPS, S.A. in September 2000. Galp Energia, SGPS, S.A. was incorporated in 1999 and is headquartered in Lisbon, Portugal.