Financial Review: Occidental Petroleum (NYSE:OXY) vs. HF Sinclair (NYSE:DINO)

HF Sinclair (NYSE:DINO) and Occidental Petroleum (NYSE:OXY) are both large-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares HF Sinclair and Occidental Petroleum”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HF Sinclair	$26.87 billion	0.80	$579.00 million	$10.48	11.54
Occidental Petroleum	$22.07 billion	2.72	$2.33 billion	$6.46	9.30

Occidental Petroleum has lower revenue, but higher earnings than HF Sinclair. Occidental Petroleum is trading at a lower price-to-earnings ratio than HF Sinclair, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

88.3% of HF Sinclair shares are held by institutional investors. Comparatively, 88.7% of Occidental Petroleum shares are held by institutional investors. 0.3% of HF Sinclair shares are held by company insiders. Comparatively, 0.5% of Occidental Petroleum shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for HF Sinclair and Occidental Petroleum, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HF Sinclair	1	7	6	2	2.56
Occidental Petroleum	0	16	11	0	2.41

HF Sinclair currently has a consensus price target of $100.00, suggesting a potential downside of 17.30%. Occidental Petroleum has a consensus price target of $65.54, suggesting a potential upside of 9.08%. Given Occidental Petroleum’s higher possible upside, analysts plainly believe Occidental Petroleum is more favorable than HF Sinclair.

Profitability

This table compares HF Sinclair and Occidental Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HF Sinclair	6.13%	18.21%	9.96%
Occidental Petroleum	28.36%	15.31%	5.69%

Risk and Volatility

HF Sinclair has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.

Dividends

HF Sinclair pays an annual dividend of $2.10 per share and has a dividend yield of 1.7%. Occidental Petroleum pays an annual dividend of $1.12 per share and has a dividend yield of 1.9%. HF Sinclair pays out 20.0% of its earnings in the form of a dividend. Occidental Petroleum pays out 17.3% 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. HF Sinclair has increased its dividend for 3 consecutive years and Occidental Petroleum has increased its dividend for 5 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Occidental Petroleum beats HF Sinclair on 10 of the 18 factors compared between the two stocks.

About HF Sinclair

HF Sinclair Corporation operates as an independent energy company. The company produces and markets gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, specialty and modified asphalt, and others. It owns and operates refineries located in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming; and markets its refined products principally in the Southwest United States and Rocky Mountains, Pacific Northwest, and in other neighboring Plains states. In addition, the company supplies fuels to approximately 1,500 independent Sinclair branded stations and licenses the use of the Sinclair brand at approximately 300 additional locations. Further, it produces base oils and other specialized lubricants; and provides petroleum product and crude oil transportation, terminalling, storage, and throughput services to the petroleum sector. HF Sinclair Corporation is headquartered in Dallas, Texas.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. Its Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; and vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.