Critical Review: HollyFrontier Corp (HOC) versus Chevron Corporation (NYSE:CVX)

HollyFrontier Corp (NYSE: HOC) and Chevron Corporation (NYSE:CVX) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitabiliy, earnings, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

62.5% of Chevron Corporation shares are owned by institutional investors. 0.4% of Chevron Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares HollyFrontier Corp and Chevron Corporation’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
HollyFrontier Corp	N/A	N/A	N/A	N/A	N/A
Chevron Corporation	$111.74 billion	1.77	$16.63 billion	$1.53	68.39

Chevron Corporation has higher revenue and earnings than HollyFrontier Corp.

Profitability

This table compares HollyFrontier Corp and Chevron Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HollyFrontier Corp	-1.23%	-3.97%	-1.60%
Chevron Corporation	2.34%	3.58%	2.03%

Dividends

Chevron Corporation pays an annual dividend of $4.32 per share and has a dividend yield of 4.1%. HollyFrontier Corp does not pay a dividend. Chevron Corporation pays out 282.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HollyFrontier Corp has raised its dividend for 31 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for HollyFrontier Corp and Chevron Corporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HollyFrontier Corp	0	0	0	0	N/A
Chevron Corporation	4	3	13	0	2.45

Chevron Corporation has a consensus price target of $116.18, suggesting a potential upside of 11.04%. Given Chevron Corporation’s higher probable upside, analysts plainly believe Chevron Corporation is more favorable than HollyFrontier Corp.

Summary

Chevron Corporation beats HollyFrontier Corp on 9 of the 11 factors compared between the two stocks.

About HollyFrontier Corp

HollyFrontier Corporation is an independent petroleum refiner. The Company produces various light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. It segments include Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of the Company’s El Dorado, Kansas (the El Dorado Refinery); refinery facilities located in Tulsa, Oklahoma (collectively, the Tulsa Refineries); a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the Navajo Refinery); refinery located in Cheyenne, Wyoming (the Cheyenne Refinery); a refinery in Woods Cross, Utah (the Woods Cross Refinery), and HollyFrontier Asphalt Company (HFC Asphalt). The HEP segment involves all of the operations of HEP. HEP is a limited partnership, which owns and operates logistic assets.

About Chevron Corporation

Chevron Corporation (Chevron) manages its investments in subsidiaries and affiliates, and provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in integrated energy and chemicals operations. The Company operates through two business segments: Upstream and Downstream. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by international oil export pipelines; processing, transporting, storage and marketing of natural gas, and a gas-to-liquids plant. Downstream operations consist primarily of refining of crude oil into petroleum products; marketing of crude oil and refined products; transporting of crude oil and refined products, and manufacturing and marketing of commodity petrochemicals.