Critical Comparison: Hess Corporation (HES) and PBF Energy (PBF)
Hess Corporation (NYSE: HES) and PBF Energy (NYSE:PBF) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.
Hess Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. PBF Energy pays an annual dividend of $1.20 per share and has a dividend yield of 5.7%. Hess Corporation pays out -5.2% of its earnings in the form of a dividend. PBF Energy pays out -363.6% 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. PBF Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent recommendations for Hess Corporation and PBF Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hess Corporation presently has a consensus target price of $53.91, indicating a potential upside of 30.44%. PBF Energy has a consensus target price of $23.33, indicating a potential upside of 10.27%. Given Hess Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Hess Corporation is more favorable than PBF Energy.
Risk & Volatility
Hess Corporation has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500. Comparatively, PBF Energy has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.
Insider & Institutional Ownership
85.8% of Hess Corporation shares are held by institutional investors. 11.8% of Hess Corporation shares are held by insiders. Comparatively, 2.6% of PBF Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Hess Corporation and PBF Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Hess Corporation and PBF Energy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hess Corporation||$4.94 billion||2.66||$1.45 billion||($19.30)||-2.14|
|PBF Energy||$19.03 billion||0.12||$188.05 million||($0.33)||-64.12|
Hess Corporation has higher revenue, but lower earnings than PBF Energy. PBF Energy is trading at a lower price-to-earnings ratio than Hess Corporation, indicating that it is currently the more affordable of the two stocks.
Hess Corporation beats PBF Energy on 8 of the 15 factors compared between the two stocks.
Hess Corporation Company Profile
Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company’s segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, Equatorial Guinea, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.
PBF Energy Company Profile
PBF Energy Inc. (PBF Energy) is a holding company. The Company is an independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company operates through two segments: Refining and Logistics. It sells its products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States and Canada, and ships products to other international destinations. As of December 31, 2016, it owned and operated five domestic oil refineries and related assets. As of December 31, 2016, its refineries had a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (bpd) and a weighted-average Nelson Complexity Index of approximately 12.2. As of December 31, 2016, the Company owned and operated five refineries providing geographic and market diversity.
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