Financial Comparison: Cenovus Energy (CVE) vs. Phillips 66 (PSX)

Phillips 66 (NYSE: PSX) and Cenovus Energy (NYSE:CVE) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitabiliy, valuation and analyst recommendations.

Dividends

Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 3.5%. Cenovus Energy pays an annual dividend of $0.15 per share and has a dividend yield of 1.8%. Phillips 66 pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cenovus Energy pays out -71.4% of its earnings in the form of a dividend. Cenovus Energy has increased its dividend for 5 consecutive years.

Profitability

This table compares Phillips 66 and Cenovus Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Phillips 66 1.86% 5.98% 2.81%
Cenovus Energy -1.64% 0.03% 0.01%

Valuation & Earnings

This table compares Phillips 66 and Cenovus Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Phillips 66 $76.71 billion 0.54 $2.05 billion $3.22 24.91
Cenovus Energy $10.21 billion 0.70 $1.22 billion ($0.21) -40.62

Phillips 66 has higher revenue and earnings than Cenovus Energy. Cenovus Energy is trading at a lower price-to-earnings ratio than Phillips 66, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Phillips 66 and Cenovus Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Phillips 66 0 10 4 0 2.29
Cenovus Energy 1 6 7 0 2.43

Phillips 66 presently has a consensus price target of $84.50, suggesting a potential upside of 5.35%. Cenovus Energy has a consensus price target of $19.83, suggesting a potential upside of 132.51%. Given Cenovus Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Cenovus Energy is more favorable than Phillips 66.

Institutional & Insider Ownership

70.0% of Phillips 66 shares are owned by institutional investors. Comparatively, 84.1% of Cenovus Energy shares are owned by institutional investors. 0.5% of Phillips 66 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Phillips 66 has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Cenovus Energy has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Summary

Phillips 66 beats Cenovus Energy on 9 of the 16 factors compared between the two stocks.

Phillips 66 Company Profile

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.

Cenovus Energy Company Profile

Cenovus Energy Inc. is a Canada-based integrated oil company. The Company is engaged in the business of developing, producing and marketing crude oil, natural gas liquids (NGL) and natural gas. Its segments include Oil Sands, Conventional, Refining and Marketing, and Corporate and Eliminations. Its Oil Sands segment includes the development and production of bitumen and natural gas in northeast Alberta. Its bitumen assets include Foster Creek, Christina Lake and Narrows Lake, as well as projects in the early-stages of development, such as Grand Rapids and Telephone Lake. Its Conventional segment includes the development and production of conventional crude oil, NGLs and natural gas in Alberta and Saskatchewan, including the heavy oil assets at Pelican Lake, the carbon dioxide (CO2) enhanced oil recovery (EOR) project at Weyburn. Its Refining and Marketing segment includes transporting and selling crude oil and natural gas and joint ownership of two refineries in the United States.

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