Critical Analysis: Petrosonic Energy (PSON) & Valvoline (VVV)

Valvoline (NYSE:VVV) and Petrosonic Energy (OTCMKTS:PSON) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Profitability

This table compares Valvoline and Petrosonic Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valvoline 9.97% -80.99% 13.29%
Petrosonic Energy N/A N/A N/A

Dividends

Valvoline pays an annual dividend of $0.42 per share and has a dividend yield of 2.3%. Petrosonic Energy does not pay a dividend. Valvoline pays out 32.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

99.8% of Valvoline shares are held by institutional investors. 0.5% of Valvoline shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Valvoline and Petrosonic Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valvoline $2.29 billion 1.48 $166.00 million $1.29 13.91
Petrosonic Energy N/A N/A N/A N/A N/A

Valvoline has higher revenue and earnings than Petrosonic Energy.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Valvoline and Petrosonic Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valvoline 2 3 4 0 2.22
Petrosonic Energy 0 0 0 0 N/A

Valvoline presently has a consensus price target of $23.29, suggesting a potential upside of 29.73%. Given Valvoline’s higher possible upside, equities research analysts clearly believe Valvoline is more favorable than Petrosonic Energy.

Summary

Valvoline beats Petrosonic Energy on 8 of the 10 factors compared between the two stocks.

Valvoline Company Profile

Valvoline Inc. manufactures and markets engine and automotive maintenance products and services. It operates through three segments: Core North America, Quick Lubes, and International. The company offers lubricants for passenger car, light duty, and heavy duty; antifreeze/coolants for original equipment manufacturers; functional and maintenance chemicals, such as brake fluids and power steering fluids, as well as specialty coatings for automotive and industrial applications comprising rust prevention and sound absorption; and oil and air filters for light-duty vehicles. It also provides windshield wiper blades, light bulbs, serpentine belts, and drain plugs. In addition, the company operates Valvoline instant oil change service centers. As of December 18, 2018, it operated approximately 1,170 Valvoline Instant Oil Change SM centers in the United States; and approximately 100 Great Canadian Oil Change locations in Canada. The company also serves car dealers, general repair shops, and third-party quick lube locations, as well as through a network of approximately 200 distributors. It has operations in North America, Europe, the Asia Pacific, the Middle East, Latin America, Africa, and other countries. Valvoline Inc. was founded in 1866 and is headquartered in Lexington, Kentucky.

Petrosonic Energy Company Profile

Petrosonic Energy, Inc., a development stage company, focuses on the treatment and upgrading of heavy oil through sonicated solvent de-asphalting. It also intends to manufacture synthetic crude oil through emulsification of heavy crude oil and asphaltenes. The company was formerly known as Bearing Mineral Exploration, Inc. and changed its name to Petrosonic Energy, Inc. in May 2012. Petrosonic Energy, Inc. was founded in 2008 and is headquartered in Los Angeles, California.

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