Analyzing Sunoco (SUN) & The Competition

Sunoco (NYSE: SUN) is one of 7 publicly-traded companies in the “Petroleum products, not elsewhere classified” industry, but how does it compare to its competitors? We will compare Sunoco to similar businesses based on the strength of its analyst recommendations, dividends, risk, institutional ownership, earnings, profitability and valuation.

Insider & Institutional Ownership

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30.0% of Sunoco shares are held by institutional investors. Comparatively, 55.3% of shares of all “Petroleum products, not elsewhere classified” companies are held by institutional investors. 2.7% of shares of all “Petroleum products, not elsewhere classified” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Sunoco and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunoco 2 6 5 0 2.23
Sunoco Competitors 63 197 248 9 2.39

Sunoco currently has a consensus price target of $31.01, indicating a potential upside of 23.61%. As a group, “Petroleum products, not elsewhere classified” companies have a potential upside of 53.57%. Given Sunoco’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Sunoco has less favorable growth aspects than its competitors.

Profitability

This table compares Sunoco and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunoco 1.27% 17.06% 3.94%
Sunoco Competitors 4.93% 5.92% 1.71%

Volatility & Risk

Sunoco has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Sunoco’s competitors have a beta of 1.16, indicating that their average share price is 16% more volatile than the S&P 500.

Earnings & Valuation

This table compares Sunoco and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Sunoco $11.72 billion $149.00 million 10.96
Sunoco Competitors $15.48 billion $486.82 million -28.61

Sunoco’s competitors have higher revenue and earnings than Sunoco. Sunoco is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 13.2%. Sunoco pays out 144.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Petroleum products, not elsewhere classified” companies pay a dividend yield of 3.9% and pay out 46.2% of their earnings in the form of a dividend. Sunoco has raised its dividend for 2 consecutive years.

Summary

Sunoco competitors beat Sunoco on 11 of the 15 factors compared.

About Sunoco

Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.

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