Critical Comparison: Golar LNG (NASDAQ:GLNG) and Chevron (NYSE:CVX)

Golar LNG (NASDAQ:GLNG) and Chevron (NYSE:CVX) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Dividends

Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Chevron pays an annual dividend of $6.84 per share and has a dividend yield of 4.5%. Golar LNG pays out -1,428.6% of its earnings in the form of a dividend. Chevron pays out 88.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golar LNG has increased its dividend for 2 consecutive years and Chevron has increased its dividend for 38 consecutive years. Chevron is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

92.2% of Golar LNG shares are held by institutional investors. Comparatively, 72.4% of Chevron shares are held by institutional investors. 0.0% of Golar LNG shares are held by company insiders. Comparatively, 0.2% of Chevron shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Golar LNG and Chevron”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golar LNG	$260.37 million	15.78	$50.84 million	($0.07)	-561.43
Chevron	$202.79 billion	1.31	$17.66 billion	$7.77	19.77

Chevron has higher revenue and earnings than Golar LNG. Golar LNG is trading at a lower price-to-earnings ratio than Chevron, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Golar LNG and Chevron, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golar LNG	0	3	3	3	3.00
Chevron	3	9	11	0	2.35

Golar LNG currently has a consensus target price of $50.38, indicating a potential upside of 28.18%. Chevron has a consensus target price of $165.05, indicating a potential upside of 7.46%. Given Golar LNG’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Golar LNG is more favorable than Chevron.

Profitability

This table compares Golar LNG and Chevron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golar LNG	-2.83%	6.36%	3.44%
Chevron	7.02%	9.90%	5.87%

Volatility & Risk

Golar LNG has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Chevron has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Summary

Chevron beats Golar LNG on 12 of the 18 factors compared between the two stocks.

About Golar LNG

Golar LNG Limited designs, converts, owns, and operates marine infrastructure for the liquefaction of natural gas. The company operates through three segments: FLNG, Corporate and Other, and Shipping. It engages in the regasification, storage, and offloading of liquefied natural gas (LNG); operation of floating liquefaction natural gas (FLNG) vessels or projects; transportation of LNG carriers; and vessel management activities. Golar LNG Limited was founded in 1946 and is headquartered in Hamilton, Bermuda.

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.