China Petroleum & Chemical (NYSE: SNP) and Western Gas Partners (NYSE:WES) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.
Insider and Institutional Ownership
0.9% of China Petroleum & Chemical shares are owned by institutional investors. Comparatively, 61.5% of Western Gas Partners shares are owned by institutional investors. 92.2% of China Petroleum & Chemical shares are owned by company insiders. Comparatively, 0.0% of Western Gas Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings for China Petroleum & Chemical and Western Gas Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Petroleum & Chemical||0||3||4||0||2.57|
|Western Gas Partners||0||6||5||0||2.45|
Western Gas Partners has a consensus target price of $57.90, suggesting a potential upside of 21.74%. Given Western Gas Partners’ higher probable upside, analysts plainly believe Western Gas Partners is more favorable than China Petroleum & Chemical.
This table compares China Petroleum & Chemical and Western Gas Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Petroleum & Chemical||N/A||4.48%||2.54%|
|Western Gas Partners||25.24%||14.38%||7.25%|
Earnings and Valuation
This table compares China Petroleum & Chemical and Western Gas Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|China Petroleum & Chemical||$290.79 billion||0.34||$7.02 billion||$6.69||12.15|
|Western Gas Partners||$2.25 billion||3.23||$567.48 million||$1.27||37.45|
China Petroleum & Chemical has higher revenue and earnings than Western Gas Partners. China Petroleum & Chemical is trading at a lower price-to-earnings ratio than Western Gas Partners, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
China Petroleum & Chemical has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Western Gas Partners has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
China Petroleum & Chemical pays an annual dividend of $3.55 per share and has a dividend yield of 4.4%. Western Gas Partners pays an annual dividend of $3.68 per share and has a dividend yield of 7.7%. China Petroleum & Chemical pays out 53.1% of its earnings in the form of a dividend. Western Gas Partners pays out 289.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. China Petroleum & Chemical has raised its dividend for 10 consecutive years.
Western Gas Partners beats China Petroleum & Chemical on 9 of the 17 factors compared between the two stocks.
About China Petroleum & Chemical
China Petroleum & Chemical Corporation is a China-based energy and chemical company. The Company’s segments include Exploration and Development segment, Refining segment, Marketing and Distribution segment, Chemicals segment, and Corporate and Others segment. Exploration and Development segment explores and develops oil fields, as well as produces crude oil and natural gas. Refining segment processes and purifies crude oil, which is sourced from Exploration and Development segment and external suppliers. Marketing and Distribution segment owns and operates oil depots and service stations in China. Chemical segment manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external customers.
About Western Gas Partners
Western Gas Partners, LP is a master limited partnership (MLP) that acquires, owns, develops and operates midstream energy assets. The Company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids (NGLs) and crude oil in the United States. The Company provides midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. The Company’s operations and activities are managed by its general partner, which is indirectly controlled by Anadarko through Western Gas Equity Partners, LP (WGP). As of December 31, 2016, its assets and investments consisted of gathering systems, treating facilities, natural gas processing plants/trains, NGL pipelines, natural gas pipelines and oil pipelines. These assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas.
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