PETROLEO BRASIL/ADR (NYSE:PBR) and Rwe Ag Sp (OTCMKTS:RWEOY) are both large-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Volatility & Risk
PETROLEO BRASIL/ADR has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Rwe Ag Sp has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
Profitability
This table compares PETROLEO BRASIL/ADR and Rwe Ag Sp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PETROLEO BRASIL/ADR | 10.45% | 10.41% | 3.35% |
| Rwe Ag Sp | N/A | -8.72% | -1.48% |
Insider and Institutional Ownership
7.7% of PETROLEO BRASIL/ADR shares are owned by institutional investors. Comparatively, 0.1% of Rwe Ag Sp shares are owned by institutional investors. 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.
Dividends
PETROLEO BRASIL/ADR pays an annual dividend of $0.34 per share and has a dividend yield of 2.2%. Rwe Ag Sp pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. PETROLEO BRASIL/ADR pays out 23.8% of its earnings in the form of a dividend. Rwe Ag Sp pays out -147.4% 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.
Valuation & Earnings
This table compares PETROLEO BRASIL/ADR and Rwe Ag Sp’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PETROLEO BRASIL/ADR | $95.58 billion | 1.06 | $7.17 billion | $1.43 | 10.85 |
| Rwe Ag Sp | $15.98 billion | 1.11 | $465.31 million | ($0.38) | -76.08 |
PETROLEO BRASIL/ADR has higher revenue and earnings than Rwe Ag Sp. Rwe Ag Sp is trading at a lower price-to-earnings ratio than PETROLEO BRASIL/ADR, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for PETROLEO BRASIL/ADR and Rwe Ag Sp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PETROLEO BRASIL/ADR | 1 | 0 | 6 | 0 | 2.71 |
| Rwe Ag Sp | 0 | 1 | 1 | 0 | 2.50 |
PETROLEO BRASIL/ADR currently has a consensus target price of $20.50, indicating a potential upside of 32.17%. Given PETROLEO BRASIL/ADR’s stronger consensus rating and higher probable upside, analysts clearly believe PETROLEO BRASIL/ADR is more favorable than Rwe Ag Sp.
Summary
PETROLEO BRASIL/ADR beats Rwe Ag Sp on 13 of the 15 factors compared between the two stocks.
About PETROLEO BRASIL/ADR
Petróleo Brasileiro S.A. – Petrobras operates in the oil, natural gas, and energy industries in Brazil and internationally. It 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. The company’s Exploration and Production segment engages in the exploration, development, and production of crude oil, natural gas liquids, and natural gas primarily for supplies to the its domestic refineries. Its Refining, Transportation and Marketing segment is involved in the refining, logistics, transport, and trading of crude oil and oil products; exportation of ethanol; and extraction and processing of shale, as well as holding interests in petrochemical companies. The company’s Gas and Power segment engages in the logistic and trading of natural gas and liquid natural gas; generation of electricity through thermoelectric power plants; holding interests in transportation and distribution of natural gas; and fertilizer business operations. Its Biofuels segment is involved in the production of biodiesel and its co-products, as well as production and trading of ethanol, sugar, and electric power generated from sugarcane bagasse. The company’s Distribution segment sells oil products, including gasoline and diesel; ethanol; and vehicle natural gas, as well as distributes oil products in South America. Petróleo Brasileiro S.A. – Petrobras was founded in 1953 and is headquartered in Rio de Janeiro, Brazil.
About Rwe Ag Sp
RWE Aktiengesellschaft supplies electricity and gas. It operates through four segments: Lignite & Nuclear; European Power; Supply & Trading; and Innogy. The company operates power stations based on lignite, coal, gas, nuclear power, renewable energies, and hydro and biomass; and operates and maintains solar farms, as well as generates heat. It is also involved in the supply and trade of power, gas, coal, freight, oil, weather derivatives, biomass, emissions certificates, and renewable energies; and construction of battery storage facilities. RWE Aktiengesellschaft manages electricity distribution networks; and gas distribution networks. The company offers its products and services to residential and commercial customers, industrial and corporate customers, and distributors in Germany, the Netherlands, Belgium, the United Kingdom, and Eastern Europe. It serves approximately 15.9 million electricity customers and approximately 6.6 million gas customers; and has a power generation capacity of approximately 40,000 megawatts. The company was founded in 1898 and is headquartered in Essen, Germany.
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