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

Profitability

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

Net Margins Return on Equity Return on Assets
Tesoro Corporation 2.35% 7.15% 3.11%
Sasol N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings for Tesoro Corporation and Sasol, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tesoro Corporation 0 6 12 0 2.67
Sasol 0 1 1 0 2.50

Tesoro Corporation currently has a consensus target price of $116.76, suggesting a potential upside of 11.32%. Given Tesoro Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Tesoro Corporation is more favorable than Sasol.

Risk and Volatility

Tesoro Corporation has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Sasol has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Insider & Institutional Ownership

78.4% of Tesoro Corporation shares are held by institutional investors. Comparatively, 1.9% of Sasol shares are held by institutional investors. 0.9% of Tesoro Corporation shares are held by insiders. Comparatively, 1.0% of Sasol shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Tesoro Corporation and Sasol’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Tesoro Corporation $24.58 billion 0.67 $734.00 million $4.93 21.28
Sasol $12.68 billion 1.54 $1.50 billion $2.35 12.76

Sasol has higher revenue, but lower earnings than Tesoro Corporation. Sasol is trading at a lower price-to-earnings ratio than Tesoro Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Tesoro Corporation pays an annual dividend of $2.36 per share and has a dividend yield of 2.3%. Sasol pays an annual dividend of $0.74 per share and has a dividend yield of 2.5%. Tesoro Corporation pays out 47.9% of its earnings in the form of a dividend. Sasol pays out 31.5% 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. Sasol is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Tesoro Corporation beats Sasol on 10 of the 15 factors compared between the two stocks.

About Tesoro Corporation

Andeavor, formerly Tesoro Corporation, is an independent petroleum refining, logistics and marketing company. he Company operates through three segments. The Refining operating segment refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas and petroleum coke for sale in bulk markets to a range of customers within its markets. The TLLP segment comprises Tesoro Logistics LP’s (TLLP) assets and operations, and includes certain crude oil and natural gas gathering assets, natural gas and natural gas liquids (NGLs) processing assets, and crude oil and refined products terminaling, and transportation. The marketing segment sells transportation fuels through branded and unbranded channels.

About Sasol

Sasol Limited is an international integrated chemicals and energy company. The Company develops and commercializes technologies, and builds and operates facilities to produce a range of product streams, including liquid fuels, chemicals and low-carbon electricity. The Company’s operating business units include Mining and, Exploration and Production International. Its Strategic Business Units are energy, base chemicals, performance chemicals and group functions. The Company’s regional operating hubs include Southern Africa Operations and International Operations. The Company operates approximately six coal mines that supply feedstock for its Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. It offers market ready fuels and oils, such as bitumen; industrial heating fuels; naphtha and illuminating paraffin transport fuels; automotive lubricants; industrial lubricants; greases; cleansers and degreasers; automotive fuels, and burner fuels.

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