Financial Analysis: Penn Virginia (NASDAQ:PVAC) and Sasol (NASDAQ:SSL)

Penn Virginia (NASDAQ:PVAC) and Sasol (NYSE:SSL) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

89.3% of Penn Virginia shares are owned by institutional investors. Comparatively, 2.0% of Sasol shares are owned by institutional investors. 0.4% of Penn Virginia shares are owned by company insiders. Comparatively, 1.0% of Sasol shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.



Profitability

This table compares Penn Virginia and Sasol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Penn Virginia 37.49% 45.92% 15.31%
Sasol N/A N/A N/A

Volatility & Risk

Penn Virginia has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Sasol has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Dividends

Sasol pays an annual dividend of $0.61 per share and has a dividend yield of 2.6%. Penn Virginia does not pay a dividend. Sasol pays out 29.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and price targets for Penn Virginia and Sasol, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Penn Virginia 0 0 3 0 3.00
Sasol 0 6 0 0 2.00

Penn Virginia currently has a consensus target price of $67.00, suggesting a potential upside of 129.14%. Sasol has a consensus target price of $7.50, suggesting a potential downside of 68.29%. Given Penn Virginia’s stronger consensus rating and higher possible upside, equities analysts clearly believe Penn Virginia is more favorable than Sasol.

Earnings & Valuation

This table compares Penn Virginia and Sasol’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Penn Virginia $440.83 million 1.00 $224.79 million $9.19 3.18
Sasol $14.14 billion 1.09 $681.73 million $2.07 11.43

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

Summary

Penn Virginia beats Sasol on 10 of the 16 factors compared between the two stocks.

About Penn Virginia

Penn Virginia Corporation, an independent oil and gas company, engages in the onshore exploration, development, and production of crude oil, natural gas liquids, and natural gas in the United States. It primarily operates wells in the Eagle Ford Shale field in South Texas. As of December 31, 2018, it had total proved reserves of approximately 123 million barrels of oil equivalent; and 460 gross productive wells, as well as owned approximately 98,200 gross acres of leasehold and royalty interests. Penn Virginia Corporation was founded in 1882 and is headquartered in Houston, Texas.

About Sasol

Sasol Limited operates as an integrated chemical and energy company in South Africa. The company operates through Mining, Exploration and Production International, Energy, Base Chemicals, and Performance Chemicals segments. It operates coal mines; and develops and manages upstream interests in oil and gas exploration and production in Mozambique, South Africa, Australia, Canada, Gabon, and Australia. The company also markets and sells gas, electricity, and liquid fuels products; and develops, implements, and manages international gas-to-liquids and coal-to-liquids ventures. In addition, it produces and markets explosives, fertilizers, polymers, and mining reagents, as well as alcohols, ketones, acrylate monomers, and other oxygenated solvemnts for use in various applications, such as aerosols, cosmetics, fragrances, packaging, paints, adhesives, pharmaceuticals, polishes, printing and plastics, mining, pulp and paper, steel, textiles, water treatment and purification, agricultural fertilizers, and chemicals. Further, the company markets organic and inorganic commodity and specialty chemicals comprising organics, inorganics, wax, phenolic, carbon, ammonia, and specialty gases; and offers engineering and project services. Sasol Limited was founded in 1950 and is headquartered in Johannesburg, South Africa.

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