Exxon Mobil (NYSE:XOM) versus Sunoco (NYSE:SUN) Head-To-Head Comparison

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Exxon Mobil (NYSE:XOM) and Sunoco (NYSE:SUN) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Dividends

Exxon Mobil pays an annual dividend of $3.48 per share and has a dividend yield of 10.6%. Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 13.5%. Exxon Mobil pays out 154.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunoco pays out 145.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Exxon Mobil has raised its dividend for 13 consecutive years and Sunoco has raised its dividend for 1 consecutive years. Sunoco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Exxon Mobil and Sunoco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exxon Mobil 3.24% 2.09% 1.12%
Sunoco 1.29% 15.93% 2.03%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Exxon Mobil and Sunoco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exxon Mobil 5 20 3 0 1.93
Sunoco 0 3 7 0 2.70

Exxon Mobil currently has a consensus price target of $50.52, indicating a potential upside of 53.19%. Sunoco has a consensus price target of $28.67, indicating a potential upside of 16.96%. Given Exxon Mobil’s higher possible upside, equities research analysts clearly believe Exxon Mobil is more favorable than Sunoco.

Institutional and Insider Ownership

50.9% of Exxon Mobil shares are held by institutional investors. Comparatively, 25.1% of Sunoco shares are held by institutional investors. 0.1% of Exxon Mobil shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Exxon Mobil has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Sunoco has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Earnings & Valuation

This table compares Exxon Mobil and Sunoco’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exxon Mobil $264.94 billion 0.53 $14.34 billion $2.25 14.66
Sunoco $16.60 billion 0.15 $313.00 million $2.27 10.80

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

Summary

Sunoco beats Exxon Mobil on 9 of the 17 factors compared between the two stocks.

About Exxon Mobil

Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States, Canada/Other Americas, Europe, Africa, Asia, and Australia/Oceania. It operates through Upstream, Downstream, and Chemical segments. The company is also involved in the manufacture, trade, transport, and sale of crude oil, petroleum products, and other specialty products; and manufactures and markets petrochemicals, including olefins, polyolefins, aromatics, and various other petrochemicals. As of December 31, 2018, it had approximately 24,696 net operated wells with proved reserves of 24.3 billion oil-equivalent barrels. The company was founded in 1870 and is headquartered in Irving, Texas.

About Sunoco

Sunoco LP, together with its subsidiaries, engages in the distribution and retailing of motor fuels in the United States. The company operates through two segments, Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel from independent refiners and major oil companies and supplies it to independently operated dealer stations, distributors and other consumer of motor fuel, and partnership operated stations, as well as to commission agent locations. The All Other segment operates retail stores that offer motor fuel, merchandise, foodservice, and other services that include car washes, lottery, automated teller machines, money orders, prepaid phone cards, and wireless services. It also leases and rents real estate properties. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP is headquartered in Dallas, Texas.

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