Marathon Petroleum (NYSE:MPC) vs. Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) Head to Head Analysis

Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) and Marathon Petroleum (NYSE:MPC) are both large-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Institutional & Insider Ownership

76.8% of Marathon Petroleum shares are held by institutional investors. 0.2% of Marathon Petroleum shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Petroleo Brasileiro S.A.- Petrobras and Marathon Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petroleo Brasileiro S.A.- Petrobras	24.52%	30.61%	10.94%
Marathon Petroleum	5.48%	31.96%	8.88%

Dividends

Petroleo Brasileiro S.A.- Petrobras pays an annual dividend of $0.43 per share and has a dividend yield of 1.7%. Marathon Petroleum pays an annual dividend of $4.00 per share and has a dividend yield of 0.9%. Petroleo Brasileiro S.A.- Petrobras pays out 10.9% of its earnings in the form of a dividend. Marathon Petroleum pays out 13.8% 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. Marathon Petroleum has raised its dividend for 3 consecutive years. Petroleo Brasileiro S.A.- Petrobras is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Petroleo Brasileiro S.A.- Petrobras and Marathon Petroleum”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petroleo Brasileiro S.A.- Petrobras	$89.19 billion	1.78	$19.63 billion	$3.96	6.24
Marathon Petroleum	$135.22 billion	1.00	$4.05 billion	$29.09	15.94

Petroleo Brasileiro S.A.- Petrobras has higher earnings, but lower revenue than Marathon Petroleum. Petroleo Brasileiro S.A.- Petrobras is trading at a lower price-to-earnings ratio than Marathon Petroleum, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Petroleo Brasileiro S.A.- Petrobras and Marathon Petroleum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petroleo Brasileiro S.A.- Petrobras	0	2	5	0	2.71
Marathon Petroleum	0	5	11	1	2.76

Petroleo Brasileiro S.A.- Petrobras presently has a consensus target price of $21.16, suggesting a potential downside of 14.35%. Marathon Petroleum has a consensus target price of $379.94, suggesting a potential downside of 18.04%. Given Petroleo Brasileiro S.A.- Petrobras’ higher possible upside, equities research analysts clearly believe Petroleo Brasileiro S.A.- Petrobras is more favorable than Marathon Petroleum.

Volatility & Risk

Petroleo Brasileiro S.A.- Petrobras has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Summary

Marathon Petroleum beats Petroleo Brasileiro S.A.- Petrobras on 11 of the 18 factors compared between the two stocks.

About Petroleo Brasileiro S.A.- Petrobras

Petróleo Brasileiro S.A. – Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through three segments: Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries. The Refining, Transportation and Marketing segment engages in the refining, logistics, transport, acquisition, and exports of crude oil; and production of fertilizers, as well as holding interests in petrochemical companies. The Gas and Power segment is involved in the logistic and trading of natural gas and electricity; transportation and trading of LNG; generation of electricity through thermoelectric power plants; renewable energy businesses; low carbon services; and natural gas processing business, as well as production of biodiesel and its co-products. The company also 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. In addition, it engages in research, development, production, transport, distribution, and trading of energy. Petróleo Brasileiro S.A. – Petrobras was incorporated in 1953 and is headquartered in Rio de Janeiro, Brazil.

About Marathon Petroleum

Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. The company operates through Refining & Marketing, and Midstream segments. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale and distributes refined products, including renewable diesel, through transportation, storage, distribution, and marketing services. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures propane and petrochemicals. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats, and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. Marathon Petroleum Corporation was founded in 1887 and is headquartered in Findlay, Ohio.