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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Sasol and Occidental Petroleum, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sasol 0 6 0 0 2.00
Occidental Petroleum 1 14 6 0 2.24

Sasol currently has a consensus price target of $7.50, indicating a potential downside of 69.49%. Occidental Petroleum has a consensus price target of $74.69, indicating a potential upside of 51.91%. Given Occidental Petroleum’s stronger consensus rating and higher possible upside, analysts plainly believe Occidental Petroleum is more favorable than Sasol.

Volatility and Risk

Sasol has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Institutional and Insider Ownership

2.0% of Sasol shares are held by institutional investors. Comparatively, 81.7% of Occidental Petroleum shares are held by institutional investors. 1.0% of Sasol shares are held by insiders. Comparatively, 0.2% of Occidental Petroleum 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.

Profitability

This table compares Sasol and Occidental Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sasol N/A N/A N/A
Occidental Petroleum 21.17% 17.70% 8.49%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sasol $14.14 billion 1.13 $681.73 million $2.07 11.87
Occidental Petroleum $4.80 billion 7.66 $4.13 billion $5.01 9.81

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

Dividends

Sasol pays an annual dividend of $0.61 per share and has a dividend yield of 2.5%. Occidental Petroleum pays an annual dividend of $3.12 per share and has a dividend yield of 6.3%. Sasol pays out 29.5% of its earnings in the form of a dividend. Occidental Petroleum pays out 62.3% 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. Occidental Petroleum has increased its dividend for 16 consecutive years. Occidental Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Occidental Petroleum beats Sasol on 12 of the 17 factors compared between the two stocks.

About Sasol

Sasol Limited operates as an integrated chemical and energy company in South Africa. The company operates through Mining, Exploration and Production International, Energy, Base Chemicals, and Performance Chemicals segments. It operates coal mines; and develops and manages upstream interests in oil and gas exploration and production in Mozambique, South Africa, Australia, Canada, Gabon, and Australia. The company also markets and sells gas, electricity, and liquid fuels products; and develops, implements, and manages international gas-to-liquids and coal-to-liquids ventures. In addition, it produces and markets explosives, fertilizers, polymers, and mining reagents, as well as alcohols, ketones, acrylate monomers, and other oxygenated solvemnts for use in various applications, such as aerosols, cosmetics, fragrances, packaging, paints, adhesives, pharmaceuticals, polishes, printing and plastics, mining, pulp and paper, steel, textiles, water treatment and purification, agricultural fertilizers, and chemicals. Further, the company markets organic and inorganic commodity and specialty chemicals comprising organics, inorganics, wax, phenolic, carbon, ammonia, and specialty gases; and offers engineering and project services. Sasol Limited was founded in 1950 and is headquartered in Johannesburg, South Africa.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

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