Phillips 66 (NYSE: PSX) and World Fuel Services (NYSE:INT) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.
Institutional and Insider Ownership
77.7% of Phillips 66 shares are held by institutional investors. Comparatively, 89.5% of World Fuel Services shares are held by institutional investors. 0.6% of Phillips 66 shares are held by company insiders. Comparatively, 2.2% of World Fuel Services shares are held 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.
This is a summary of recent ratings and price targets for Phillips 66 and World Fuel Services, as reported by MarketBeat.
||Strong Buy Ratings
|World Fuel Services
Phillips 66 presently has a consensus target price of $104.61, suggesting a potential upside of 1.93%. World Fuel Services has a consensus target price of $38.00, suggesting a potential upside of 48.09%. Given World Fuel Services’ higher probable upside, analysts plainly believe World Fuel Services is more favorable than Phillips 66.
Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 2.7%. World Fuel Services pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. Phillips 66 pays out 63.9% of its earnings in the form of a dividend. World Fuel Services pays out 12.9% 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. Phillips 66 has raised its dividend for 6 consecutive years and World Fuel Services has raised its dividend for 3 consecutive years. Phillips 66 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Phillips 66 has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, World Fuel Services has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.
Valuation & Earnings
This table compares Phillips 66 and World Fuel Services’ revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
|World Fuel Services
Phillips 66 has higher revenue and earnings than World Fuel Services. World Fuel Services is trading at a lower price-to-earnings ratio than Phillips 66, indicating that it is currently the more affordable of the two stocks.
This table compares Phillips 66 and World Fuel Services’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|World Fuel Services
Phillips 66 beats World Fuel Services on 13 of the 17 factors compared between the two stocks.
Phillips 66 Company Profile
Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks, delivers refined products to market, and provides terminaling and storage services for crude oil and petroleum products; transports, stores, fractionates, and markets natural gas liquids, exports LPG, and provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment manufactures and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, drilling chemicals, and mining chemicals. The Refining segment buys, sells, and refines crude oil and other feedstocks into petroleum products comprising gasolines, distillates, and aviation fuels at 13 refineries primarily in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products consisting of gasolines, distillates, and aviation fuels primarily in the United States and Europe. It also manufactures and sells specialty products, such as petroleum coke products, waxes, solvents, and polypropylene. In addition, this segment generates electricity and provides merchant power into the Texas market. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.
World Fuel Services Company Profile
World Fuel Services Corporation engages in the distribution of fuel, and related products and services in the aviation, marine, and land transportation industries worldwide. Its Aviation segment offers fuel management; price risk management; ground handling; dispatch; and international trip planning services, such as flight plans, weather reports, and overflight permits. This segment supplies fuel, and related products and services to commercial airlines, second and third tier airlines, cargo and cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets, and to the United States (U.S.) and foreign governments, as well as intergovernmental organizations. The company's Land segment distributes fuel, heating oil, propane, natural gas, lubricants, and related products and services to petroleum distributors and retail petroleum operators, as well as for industrial, commercial, residential, and government customers. This segment also offers management services for procuring fuel and price risk management; advisory and fulfillment solutions related to power, natural gas, and other energy products; and card payment solutions, government payment systems for fuel procurement, merchant processing services, payment solutions for tolls, and commercial payment programs. Its Marine segment markets fuel, lubricants, and related products and services to international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the U.S. and foreign governments, and other fuel suppliers. Its marine fuel-related services include management services to procure fuel, cost control, quality control, claims management, and card payment and related processing services. This segment also engages in the fueling of vessels, and transportation and delivery of fuel and fuel-related products. The company was founded in 1984 and is headquartered in Miami, Florida.
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