Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) & BP (NYSE:BP) Head to Head Analysis

BP (NYSE:BP) and Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) are both large-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Profitability

This table compares BP and Petroleo Brasileiro S.A.- Petrobras’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BP	-0.62%	9.51%	2.74%
Petroleo Brasileiro S.A.- Petrobras	9.83%	23.98%	8.37%

Institutional and Insider Ownership

11.0% of BP shares are owned by institutional investors. 1.0% of BP shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

BP pays an annual dividend of $1.90 per share and has a dividend yield of 5.9%. Petroleo Brasileiro S.A.- Petrobras pays an annual dividend of $0.99 per share and has a dividend yield of 8.2%. BP pays out -413.0% of its earnings in the form of a dividend. Petroleo Brasileiro S.A.- Petrobras pays out 73.9% 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for BP and Petroleo Brasileiro S.A.- Petrobras, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BP	2	14	1	3	2.25
Petroleo Brasileiro S.A.- Petrobras	0	1	6	1	3.00

BP presently has a consensus target price of $35.50, indicating a potential upside of 10.90%. Petroleo Brasileiro S.A.- Petrobras has a consensus target price of $17.40, indicating a potential upside of 44.76%. Given Petroleo Brasileiro S.A.- Petrobras’ stronger consensus rating and higher probable upside, analysts clearly believe Petroleo Brasileiro S.A.- Petrobras is more favorable than BP.

Valuation & Earnings

This table compares BP and Petroleo Brasileiro S.A.- Petrobras”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BP	$194.63 billion	0.44	$381.00 million	($0.46)	-69.59
Petroleo Brasileiro S.A.- Petrobras	$91.42 billion	0.85	$7.53 billion	$1.34	8.97

Petroleo Brasileiro S.A.- Petrobras has lower revenue, but higher earnings than BP. BP is trading at a lower price-to-earnings ratio than Petroleo Brasileiro S.A.- Petrobras, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

BP has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Petroleo Brasileiro S.A.- Petrobras has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Summary

Petroleo Brasileiro S.A.- Petrobras beats BP on 12 of the 17 factors compared between the two stocks.

About BP

BP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. It engages in the production of natural gas, and integrated gas and power; trading of gas; operation of onshore and offshore wind power, as well as hydrogen and carbon capture and storage facilities; trading and marketing of renewable and non-renewable power; and production of crude oil. In addition, the company involved in convenience and retail fuel, EV charging, Castrol lubricant, aviation, B2B, and midstream businesses; refining and oil trading; and bioenergy business. The company was founded in 1908 and is headquartered in London, the United Kingdom.

About Petroleo Brasileiro S.A.- Petrobras

Petróleo Brasileiro S.A. – Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through three segments: Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries. The Refining, Transportation and Marketing segment engages in the refining, logistics, transport, acquisition, and exports of crude oil; and production of fertilizers, as well as holding interests in petrochemical companies. The Gas and Power segment is involved in the logistic and trading of natural gas and electricity; transportation and trading of LNG; generation of electricity through thermoelectric power plants; renewable energy businesses; low carbon services; and natural gas processing business, as well as production of biodiesel and its co-products. The company also engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields, and shale or other rocks, as well as oil products, natural gas, and other liquid hydrocarbons. In addition, it engages in research, development, production, transport, distribution, and trading of energy. Petróleo Brasileiro S.A. – Petrobras was incorporated in 1953 and is headquartered in Rio de Janeiro, Brazil.