Chase
William DeLong
FINC 350 G
Week 5 Project
The two companies that I will be comparing ratios for are Occidental Petroleum Corporation and Valero Energy Corporation to each other as well as to the industry.
First I would like to start of by comparing the P/E ratio, or the price to earnings ratio of the two companies as well as to the industry standard. This ratio is used to measure the relationship between a stock’s price and its earnings. It will tell you what the market is willing to pay for the company’s earnings. There fore when comparing these two companies and the market it looks like Valero Energy would when this based on P/E ratio because it is the lowest of the two and much lower than the S&P 500.
Occidental Petroleum Corporation P/E Ratio:
2008 2009 2010 2011 2012 TTM
7.2 22.7 17.5 11.5 13.4 16.6
Valero Energy Corporation
2008 2009 2010 2011 2012 TTM
N/A N/A 14.3 5.7 9.1 6.0
S&P 500
2008 2009 2010 2011 2012 TTM
10.9 18.6 15.5 13.7 15.0 16.6
Second I will compare the price to book ratios of the two companies as well as to the industry standard. This ratio is used to compare a stock’s market value to its book value. The P/B ratio is calculated by taking the stocks price and dividing it by the total assets minus the intangible assets and liabilities. You can use this ratio to see is a stock is undervalued as well as to get an idea of what would be left if a company went bankrupt. There fore when comparing these two companies and the market it looks like Valero Energy would when this based on P/B ratio because it is the lowest of the two and much lower than the S&P 500, Which tells me that the stock is probably undervalued.
Occidental Petroleum Corporation
2008 2009 2010 2011 2012 TTM
1.8 2.3 2.5 2.0 1.5 1.8
Valero Energy Corporation
2008 2009 2010 2011 2012 TTM
0.7 0.6 0.9 0.7 1.0 1.0
S&P 500
2008 2009 2010 2011 2012 TTM
1.7 2.2 2.2 2.0 2.1 2.3
Third I will compare the price to sales ratios of
FINC 350 G
Week 5 Project
The two companies that I will be comparing ratios for are Occidental Petroleum Corporation and Valero Energy Corporation to each other as well as to the industry.
First I would like to start of by comparing the P/E ratio, or the price to earnings ratio of the two companies as well as to the industry standard. This ratio is used to measure the relationship between a stock’s price and its earnings. It will tell you what the market is willing to pay for the company’s earnings. There fore when comparing these two companies and the market it looks like Valero Energy would when this based on P/E ratio because it is the lowest of the two and much lower than the S&P 500.
Occidental Petroleum Corporation P/E Ratio:
2008 2009 2010 2011 2012 TTM
7.2 22.7 17.5 11.5 13.4 16.6
Valero Energy Corporation
2008 2009 2010 2011 2012 TTM
N/A N/A 14.3 5.7 9.1 6.0
S&P 500
2008 2009 2010 2011 2012 TTM
10.9 18.6 15.5 13.7 15.0 16.6
Second I will compare the price to book ratios of the two companies as well as to the industry standard. This ratio is used to compare a stock’s market value to its book value. The P/B ratio is calculated by taking the stocks price and dividing it by the total assets minus the intangible assets and liabilities. You can use this ratio to see is a stock is undervalued as well as to get an idea of what would be left if a company went bankrupt. There fore when comparing these two companies and the market it looks like Valero Energy would when this based on P/B ratio because it is the lowest of the two and much lower than the S&P 500, Which tells me that the stock is probably undervalued.
Occidental Petroleum Corporation
2008 2009 2010 2011 2012 TTM
1.8 2.3 2.5 2.0 1.5 1.8
Valero Energy Corporation
2008 2009 2010 2011 2012 TTM
0.7 0.6 0.9 0.7 1.0 1.0
S&P 500
2008 2009 2010 2011 2012 TTM
1.7 2.2 2.2 2.0 2.1 2.3
Third I will compare the price to sales ratios of