Sunoco (SUN) & World Fuel Services Corp (INT) Critical Analysis

Sunoco (NYSE: SUN) and World Fuel Services Corp (NYSE:INT) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, valuation, risk, dividends and earnings.

Valuation & Earnings

This table compares Sunoco and World Fuel Services Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunoco $16.72 billion 0.19 $672.28 million ($8.83) -3.53
World Fuel Services Corp $31.47 billion 0.07 $259.20 million $1.53 21.82

Sunoco has higher revenue, but lower earnings than World Fuel Services Corp. Sunoco is trading at a lower price-to-earnings ratio than World Fuel Services Corp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

27.5% of Sunoco shares are owned by institutional investors. Comparatively, 91.2% of World Fuel Services Corp shares are owned by institutional investors. 2.3% of World Fuel Services Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Sunoco and World Fuel Services Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunoco -5.00% 6.73% 1.83%
World Fuel Services Corp 0.37% 6.11% 2.30%

Volatility and Risk

Sunoco has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, World Fuel Services Corp has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Sunoco and World Fuel Services Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunoco 2 7 5 0 2.21
World Fuel Services Corp 0 0 1 0 3.00

Sunoco currently has a consensus target price of $31.00, suggesting a potential downside of 0.55%. World Fuel Services Corp has a consensus target price of $48.00, suggesting a potential upside of 43.76%. Given World Fuel Services Corp’s stronger consensus rating and higher possible upside, analysts plainly believe World Fuel Services Corp is more favorable than Sunoco.

Dividends

Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 10.6%. World Fuel Services Corp pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Sunoco pays out -37.4% of its earnings in the form of a dividend. World Fuel Services Corp pays out 15.7% 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. Sunoco has increased its dividend for 2 consecutive years. Sunoco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

World Fuel Services Corp beats Sunoco on 9 of the 17 factors compared between the two stocks.

Sunoco Company Profile

Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.

World Fuel Services Corp Company Profile

World Fuel Services Corporation is engaged in providing aviation, marine and land energy, logistics and technology solutions to customers and suppliers around the world. The Company operates through three segments: Aviation, Marine and Land. In its Aviation segment, the Company offers fuel and related products and services. In its land segment, it offers fuel, crude oil, lubricants, power solutions through its global energy management service offerings, natural gas and related products and services to customers. Under marine segment, it offers fuel, lubricants and related products and services to customers, including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the United States and foreign Governments, as well as other fuel suppliers. It offers solutions, such as oil and energy procurement, distribution and storage, financial solutions and consulting services.

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