Phillips 66 (PSX) vs. Delek US (DK) Financial Analysis

Phillips 66 (NYSE: PSX) and Delek US (NYSE:DK) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Valuation and Earnings

This table compares Phillips 66 and Delek US’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Phillips 66 $104.62 billion 0.50 $5.11 billion $4.38 25.64
Delek US $7.27 billion 0.58 $288.80 million $1.26 39.82

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Phillips 66 and Delek US, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Phillips 66 2 8 7 0 2.29
Delek US 0 2 12 3 3.06

Phillips 66 currently has a consensus price target of $109.21, suggesting a potential downside of 2.76%. Delek US has a consensus price target of $46.23, suggesting a potential downside of 7.85%. Given Phillips 66’s higher possible upside, equities analysts plainly believe Phillips 66 is more favorable than Delek US.

Dividends

Phillips 66 pays an annual dividend of $3.20 per share and has a dividend yield of 2.8%. Delek US pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. Phillips 66 pays out 73.1% of its earnings in the form of a dividend. Delek US pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 has increased its dividend for 6 consecutive years. Phillips 66 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

69.3% of Phillips 66 shares are held by institutional investors. Comparatively, 95.8% of Delek US shares are held by institutional investors. 0.6% of Phillips 66 shares are held by company insiders. Comparatively, 1.4% of Delek US shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Phillips 66 has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Delek US has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Phillips 66 4.85% 10.00% 4.71%
Delek US 2.89% 6.51% 2.13%

Summary

Phillips 66 beats Delek US on 10 of the 18 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.

Delek US Company Profile

Delek US Holdings, Inc. engages in the integrated downstream energy business in the United States. The company's Refining segment processes crude oil and other purchased feedstocks for the manufacture of various grades of gasoline, diesel fuel, aviation fuel, asphalt, and other petroleum-based products that are distributed through owned and third-party product terminals. This segment owns and operates four independent refineries located in Tyler, Texas; El Dorado, Arkansas; Big Spring, Texas; and Krotz Springs, Louisiana. This segment also owns and operates two biodiesel facilities in Crossett, Arkansas and Cleburne, Texas; and a heavy crude oil refinery in Bakersfield, California. Its Logistics segment gathers, transports, and stores crude oil, intermediate, and refined products; and markets, distributes, transports, and stores refined products for third parties. This segment owns or leases capacity on approximately 461 miles of crude oil transportation pipelines, approximately 406 miles of refined product pipelines, an approximately 600-mile crude oil gathering system, and associated crude oil storage tanks with an aggregate of approximately 7.3 million barrels of active shell capacity, as well as owns and operates nine light product terminals, and markets light products using third-party terminals. The company's Retail segment owns and leases 302 convenience store sites located primarily in Texas and New Mexico. This segment's convenience stores offer various grades of gasoline and diesel under the Alon brand name; and food products and service, tobacco products, beverages, and general merchandise, as well as money orders to the public under the 7-Eleven and Alon brand names. The company serves oil companies, independent refiners and marketers, jobbers, distributors, utility and transportation companies, independent retail fuel operators, and the United States government. Delek US Holdings, Inc. was founded in 2001 and is headquartered in Brentwood, Tennessee.

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