World Fuel Services Corporation (NYSE: INT) and Sunoco (NYSE:SUN) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Institutional and Insider Ownership
91.8% of World Fuel Services Corporation shares are held by institutional investors. Comparatively, 27.4% of Sunoco shares are held by institutional investors. 2.3% of World Fuel Services Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of recent ratings and price targets for World Fuel Services Corporation and Sunoco, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|World Fuel Services Corporation||0||0||1||0||3.00|
World Fuel Services Corporation currently has a consensus price target of $48.00, suggesting a potential upside of 45.85%. Sunoco has a consensus price target of $30.92, suggesting a potential upside of 1.57%. Given World Fuel Services Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe World Fuel Services Corporation is more favorable than Sunoco.
Earnings and Valuation
This table compares World Fuel Services Corporation and Sunoco’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|World Fuel Services Corporation||$31.47 billion||0.07||$259.20 million||$1.53||21.51|
|Sunoco||$16.72 billion||0.18||$664.00 million||($8.83)||-3.45|
Sunoco has higher revenue, but lower earnings than World Fuel Services Corporation. Sunoco is trading at a lower price-to-earnings ratio than World Fuel Services Corporation, indicating that it is currently the more affordable of the two stocks.
World Fuel Services Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 10.8%. World Fuel Services Corporation pays out 15.7% of its earnings in the form of a dividend. Sunoco pays out -37.4% 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. Sunoco has raised its dividend for 2 consecutive years. Sunoco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares World Fuel Services Corporation and Sunoco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|World Fuel Services Corporation||0.34%||5.60%||2.09%|
Volatility and Risk
World Fuel Services Corporation has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Sunoco has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
World Fuel Services Corporation beats Sunoco on 9 of the 16 factors compared between the two stocks.
About World Fuel Services Corporation
World Fuel Services Corporation is engaged in providing aviation, marine and land energy, logistics and technology solutions to customers and suppliers around the world. The Company operates through three segments: Aviation, Marine and Land. In its Aviation segment, the Company offers fuel and related products and services. In its land segment, it offers fuel, crude oil, lubricants, power solutions through its global energy management service offerings, natural gas and related products and services to customers. Under marine segment, it offers fuel, lubricants and related products and services to customers, including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the United States and foreign Governments, as well as other fuel suppliers. It offers solutions, such as oil and energy procurement, distribution and storage, financial solutions and consulting services.
Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.
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