Sasol (NYSE: SSL) and Chevron (NYSE:CVX) are both large-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, earnings, risk and profitability.

Insider and Institutional Ownership

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2.1% of Sasol shares are held by institutional investors. Comparatively, 65.0% of Chevron shares are held by institutional investors. 1.0% of Sasol shares are held by insiders. Comparatively, 0.4% of Chevron shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Sasol and Chevron’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sasol $12.68 billion 1.73 $1.50 billion N/A N/A
Chevron $141.72 billion 1.53 $9.20 billion $4.85 23.44

Chevron has higher revenue and earnings than Sasol.

Risk & Volatility

Sasol has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Chevron has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Sasol and Chevron, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sasol 0 0 3 0 3.00
Chevron 1 4 17 0 2.73

Chevron has a consensus price target of $131.06, suggesting a potential upside of 15.26%. Given Chevron’s higher possible upside, analysts clearly believe Chevron is more favorable than Sasol.

Profitability

This table compares Sasol and Chevron’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sasol N/A N/A N/A
Chevron 6.49% 5.22% 3.02%

Dividends

Sasol pays an annual dividend of $0.62 per share and has a dividend yield of 1.8%. Chevron pays an annual dividend of $4.48 per share and has a dividend yield of 3.9%. Chevron pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chevron has raised its dividend for 32 consecutive years. Chevron is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chevron beats Sasol on 11 of the 15 factors compared between the two stocks.

Sasol Company Profile

Sasol Limited operates as an integrated chemicals and energy company. It operates through Mining, Exploration and Production International, Energy, Base Chemicals, and Performance Chemicals segments. The company operates coal mines; develops and manages upstream interests in oil and gas exploration and production in Mozambique, South Africa, Australia, Canada, and Gabon; and markets commodity and various performance chemicals, such as organics, inorganics and wax value chains, as well as polymers, solvents, and ammonia-based fertilizers. It also sells liquid fuel products to retail and commercial customers and other oil companies; markets, distributes, and transports pipeline gas, as well as maintains pipelines that are used to transport gas; and provides low-carbon electricity. In addition, the company provides engineering, research and development, and technology transfer services; develops and implements international gas-to-liquids and coal-to-liquids ventures; manages cash resources; invests and procures loans; markets lubricants; develops lower-carbon energy solutions; produces, markets, and distributes chemical products; and trades and transports oil products, petrochemicals, and chemical products and derivatives. Sasol Limited was founded in 1950 and is headquartered in Johannesburg, South Africa.

Chevron Company Profile

Chevron Corporation (Chevron) manages its investments in subsidiaries and affiliates, and provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in integrated energy and chemicals operations. The Company operates through two business segments: Upstream and Downstream. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by international oil export pipelines; processing, transporting, storage and marketing of natural gas, and a gas-to-liquids plant. Downstream operations consist primarily of refining of crude oil into petroleum products; marketing of crude oil and refined products; transporting of crude oil and refined products, and manufacturing and marketing of commodity petrochemicals.

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