Critical Survey: China Petroleum & Chemical (SNP) & CVR Refining (CVRR)

China Petroleum & Chemical (NYSE: SNP) and CVR Refining (NYSE:CVRR) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for China Petroleum & Chemical and CVR Refining, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Petroleum & Chemical 0 2 4 0 2.67
CVR Refining 0 5 1 0 2.17

CVR Refining has a consensus price target of $12.10, indicating a potential downside of 28.40%. Given CVR Refining’s higher possible upside, analysts plainly believe CVR Refining is more favorable than China Petroleum & Chemical.

Profitability

This table compares China Petroleum & Chemical and CVR Refining’s 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%
CVR Refining 1.98% 7.90% 4.44%

Risk and Volatility

China Petroleum & Chemical has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, CVR Refining has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Earnings & Valuation

This table compares China Petroleum & Chemical and CVR Refining’s 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 0.35 $7.02 billion $6.69 12.42
CVR Refining $4.43 billion 0.56 $15.30 million $0.73 23.15

China Petroleum & Chemical has higher revenue and earnings than CVR Refining. China Petroleum & Chemical is trading at a lower price-to-earnings ratio than CVR Refining, indicating that it is currently the more affordable of the two stocks.

Dividends

China Petroleum & Chemical pays an annual dividend of $3.55 per share and has a dividend yield of 4.3%. CVR Refining pays an annual dividend of $3.76 per share and has a dividend yield of 22.2%. China Petroleum & Chemical pays out 53.1% of its earnings in the form of a dividend. CVR Refining pays out 515.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

0.9% of China Petroleum & Chemical shares are owned by institutional investors. Comparatively, 12.8% of CVR Refining shares are owned by institutional investors. 92.2% of China Petroleum & Chemical shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

CVR Refining beats China Petroleum & Chemical on 9 of the 16 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 CVR Refining

CVR Refining, LP is an independent downstream energy limited partnership with refining and related logistics assets that operates in the mid-continent region. The Company is a petroleum refiner. It owned and operated a complex full coking medium-sour crude oil refinery in Coffeyville, Kansas with a rated capacity of 115,000 barrels per calendar day (bpcd) and a complex crude oil refinery in Wynnewood, Oklahoma with a rated capacity of 70,000 bpcd capable of processing 20,000 bpcd of light sour crude oils (within its rated capacity of 70,000 bpcd), as of December 31, 2016. In addition, it also controlled and operated supporting logistics assets, including approximately 340 miles of active owned and leased pipelines, approximately 150 crude oil transports, a network of crude oil gathering tank farms, approximately 6.4 million barrels of owned and leased crude oil storage and over 4.5 million barrels of combined refined products and feedstocks storage capacity, as of December 31, 2016.

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