Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) versus Braskem (NYSE:BAK) Critical Survey

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

Earnings & Valuation

This table compares Petroleo Brasileiro S.A.- Petrobras and Braskem”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petroleo Brasileiro S.A.- Petrobras	$91.42 billion	0.87	$7.53 billion	$2.14	5.80
Braskem	$14.36 billion	0.10	-$2.10 billion	($2.53)	-1.37

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Petroleo Brasileiro S.A.- Petrobras	15.99%	34.11%	8.63%
Braskem	-7.36%	N/A	-0.30%

Volatility and Risk

Petroleo Brasileiro S.A.- Petrobras has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Braskem has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Petroleo Brasileiro S.A.- Petrobras and Braskem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petroleo Brasileiro S.A.- Petrobras	0	1	5	2	3.13
Braskem	0	2	1	0	2.33

Petroleo Brasileiro S.A.- Petrobras presently has a consensus target price of $16.14, indicating a potential upside of 30.11%. Braskem has a consensus target price of $7.50, indicating a potential upside of 117.08%. Given Braskem’s higher possible upside, analysts clearly believe Braskem is more favorable than Petroleo Brasileiro S.A.- Petrobras.

Summary

Petroleo Brasileiro S.A.- Petrobras beats Braskem on 11 of the 13 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 Braskem

Braskem S.A., together with its subsidiaries, produces and sells thermoplastic resins. The company operates through three segments: Brazil, United States and Europe, and Mexico. The Brazil segment produces and sells olefins, including ethylene, polymer and chemical grade propylene, butadiene, and butene-1; benzene, toluene, and xylenes products; fuels, such as automotive gasoline, liquefied petroleum gas, ethyl tertiary-butyl ether, and methyl tertiary-butyl ether; intermediates, such as cumene; aliphatics, aromatics, and hydrogenated solvents; and specialties comprising isoprene, dicyclopentadiene, piperylene, nonene, tetramer, polyisobutylene, and hydrocarbon resins. This segment also produces and sells polyethylene (PE) and polypropylene (PP); supplies electricity and other inputs to second-generation producers; produces and sells of PE, including the production of green PE from renewable resources; and produces and sells polyvinyl chloride and caustic soda. The United States and Europe segment produces and sells PP in the United States and Germany. The Mexico segment produces and sells ethylene, high-density PE, and low-density PE in Mexico. It also manufactures, sells, imports, and exports chemicals, petrochemicals, and fules; produces, supplies, and sells utilities, such as steam, water, compressed air, and industrial gases; and provides industrial services. The company was formerly known as Copene Petroquímica do Nordeste S.A. and changed its name to Braskem S.A. in 2002. Braskem S.A. was founded in 1972 and is headquartered in São Paulo, Brazil.