Reviewing Valero Energy (NYSE:VLO) and OPAL Fuels (NASDAQ:OPAL)

Valero Energy (NYSE:VLO) and OPAL Fuels (NASDAQ:OPAL) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Volatility & Risk

Valero Energy has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, OPAL Fuels has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

78.7% of Valero Energy shares are owned by institutional investors. Comparatively, 12.2% of OPAL Fuels shares are owned by institutional investors. 0.4% of Valero Energy shares are owned by insiders. Comparatively, 85.7% of OPAL Fuels shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Valero Energy and OPAL Fuels, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valero Energy	1	8	9	2	2.60
OPAL Fuels	2	1	0	0	1.33

Valero Energy currently has a consensus price target of $335.12, indicating a potential downside of 13.37%. OPAL Fuels has a consensus price target of $2.40, indicating a potential upside of 29.73%. Given OPAL Fuels’ higher possible upside, analysts clearly believe OPAL Fuels is more favorable than Valero Energy.

Earnings and Valuation

This table compares Valero Energy and OPAL Fuels”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valero Energy	$122.69 billion	0.91	$2.35 billion	$24.10	16.05
OPAL Fuels	$348.98 million	0.93	$14.75 million	($0.01)	-185.00

Valero Energy has higher revenue and earnings than OPAL Fuels. OPAL Fuels is trading at a lower price-to-earnings ratio than Valero Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Valero Energy and OPAL Fuels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valero Energy	5.17%	26.74%	11.92%
OPAL Fuels	0.65%	15.54%	0.22%

Summary

Valero Energy beats OPAL Fuels on 11 of the 15 factors compared between the two stocks.

About Valero Energy

Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending and Conventional Blendstock for Oxygenate Blending gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company owns and operates renewable diesel and ethanol plants, as well as produces renewable diesel and naphtha under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distiller grains, syrup, and inedible distillers corn oil to animal feed customers. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.

About OPAL Fuels

OPAL Fuels Inc., together with its subsidiaries, engages in the production and distribution of renewable natural gas for use as a vehicle fuel for heavy and medium-duty trucking fleets. It also designs, develops, constructs, operates, and services fueling stations for trucking fleets that use natural gas to displace diesel as transportation fuel. In addition, it offers design, development, and construction services for hydrogen fueling stations. Further, the company engages in the generation and sale of renewable power to utilities. OPAL Fuels Inc. is based in White Plains, New York.