China Petroleum & Chemical Corporation (NYSE: SNP) and Sprague Resources (NYSE:SRLP) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for China Petroleum & Chemical Corporation and Sprague Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Petroleum & Chemical Corporation 0 1 3 0 2.75
Sprague Resources 0 0 2 0 3.00

Sprague Resources has a consensus price target of $33.00, suggesting a potential upside of 32.00%. Given Sprague Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Sprague Resources is more favorable than China Petroleum & Chemical Corporation.

Dividends

China Petroleum & Chemical Corporation pays an annual dividend of $3.55 per share and has a dividend yield of 5.0%. Sprague Resources pays an annual dividend of $2.49 per share and has a dividend yield of 10.0%. China Petroleum & Chemical Corporation pays out 53.1% of its earnings in the form of a dividend. Sprague Resources pays out 139.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. China Petroleum & Chemical Corporation has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares China Petroleum & Chemical Corporation and Sprague Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
China Petroleum & Chemical Corporation $290.79 billion 0.29 $7.02 billion $6.69 10.56
Sprague Resources $2.39 billion 0.24 $10.16 million $1.79 13.97

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

Profitability

This table compares China Petroleum & Chemical Corporation and Sprague Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Petroleum & Chemical Corporation N/A 4.48% 2.54%
Sprague Resources 1.50% 24.89% 4.21%

Volatility and Risk

China Petroleum & Chemical Corporation has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Sprague Resources has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Institutional and Insider Ownership

0.8% of China Petroleum & Chemical Corporation shares are held by institutional investors. Comparatively, 22.0% of Sprague Resources shares are held by institutional investors. 92.2% of China Petroleum & Chemical Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

China Petroleum & Chemical Corporation beats Sprague Resources on 9 of the 17 factors compared between the two stocks.

China Petroleum & Chemical Corporation Company Profile

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.

Sprague Resources Company Profile

Sprague Resources LP is engaged in the purchase, storage, distribution and sale of refined products and natural gas, and provides storage and handling services for a range of materials. The Company operates through four segments: refined products, which purchases a range of refined products, such as heating oil, diesel fuel, residual fuel oil, asphalt, kerosene, jet fuel and gasoline from refining companies, trading organizations and producers; natural gas, which purchases natural gas from natural gas producers and trading companies, and sells and distributes natural gas to commercial and industrial customers in the Northeast and Mid-Atlantic United States; materials handling, which offloads, stores and prepares for delivery a range of customer-owned products, including asphalt, clay slurry, coal and heavy equipment, and other operations, which include the purchase and distribution of coal, certain commercial trucking activities and the heating equipment service business.

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