Analyzing Chevron (NYSE:CVX) and NACCO Industries (NYSE:NC)

Chevron (NYSE:CVX) and NACCO Industries (NYSE:NC) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

72.4% of Chevron shares are held by institutional investors. Comparatively, 49.1% of NACCO Industries shares are held by institutional investors. 0.6% of Chevron shares are held by insiders. Comparatively, 44.8% of NACCO Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Chevron and NACCO Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chevron	1	5	21	1	2.79
NACCO Industries	1	0	0	0	1.00

Chevron currently has a consensus price target of $213.96, suggesting a potential downside of 5.19%. Given Chevron’s stronger consensus rating and higher probable upside, equities analysts plainly believe Chevron is more favorable than NACCO Industries.

Profitability

This table compares Chevron and NACCO Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chevron	9.57%	11.09%	6.54%
NACCO Industries	6.21%	4.00%	2.60%

Earnings and Valuation

This table compares Chevron and NACCO Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chevron	$189.03 billion	2.36	$12.30 billion	$10.43	21.64
NACCO Industries	$278.48 million	0.88	$17.57 million	$2.30	14.12

Chevron has higher revenue and earnings than NACCO Industries. NACCO Industries is trading at a lower price-to-earnings ratio than Chevron, indicating that it is currently the more affordable of the two stocks.

Dividends

Chevron pays an annual dividend of $7.12 per share and has a dividend yield of 3.2%. NACCO Industries pays an annual dividend of $1.05 per share and has a dividend yield of 3.2%. Chevron pays out 68.3% of its earnings in the form of a dividend. NACCO Industries pays out 45.7% 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. Chevron has raised its dividend for 38 consecutive years and NACCO Industries has raised its dividend for 1 consecutive years. NACCO Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Chevron has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, NACCO Industries has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Summary

Chevron beats NACCO Industries on 14 of the 18 factors compared between the two stocks.

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.

About NACCO Industries

NACCO Industries, Inc., together with its subsidiaries, engages in the natural resources business. The company operates through three segments: Coal Mining, North American Mining, and Minerals Management. The Coal Mining segment operates surface coal mines under long-term contracts with power generation companies. Coal is surface mined in North Dakota and Mississippi. The North American Mining segment provides value-added contract mining and other services for producers of aggregates, activated carbon, lithium, and other industrial minerals; and contract mining services for independently owned mines and quarries in Florida, Texas, Arkansas, Virginia, and Nebraska. This segment also offers mining design and consulting services. The Minerals Management segment is involved in the leasing of its royalty and mineral interests to third-party exploration and production companies, and other mining companies, which grants them the rights to explore, develop, mine, produce, market, and sell gas, oil, and coal. NACCO Industries, Inc. was founded in 1913 and is headquartered in Cleveland, Ohio.