Hindustan Petroleum vs Indian Oil Which Is a Better Investment?

Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOCL) are two of the largest state-owned oil and gas companies in India. Both companies are key players in the energy sector and have a significant impact on the country's economy. Investors often compare the stocks of HPCL and IOCL to make informed investment decisions. While HPCL is known for its strong refining and marketing capabilities, IOCL has a diverse portfolio including petroleum products, petrochemicals, and natural gas. Both companies have shown resilience in the face of volatile market conditions, making them attractive options for investors seeking stability and growth in the energy sector.

Hindustan Petroleum or Indian Oil?

When comparing Hindustan Petroleum and Indian Oil, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Hindustan Petroleum and Indian Oil.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Hindustan Petroleum has a dividend yield of 5.26%, while Indian Oil has a dividend yield of 4.93%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Hindustan Petroleum reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Indian Oil reports a 5-year dividend growth of -22.02% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Hindustan Petroleum P/E ratio at 20.25 and Indian Oil's P/E ratio at 11.44. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hindustan Petroleum P/B ratio is 1.85 while Indian Oil's P/B ratio is 1.11.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hindustan Petroleum has seen a 5-year revenue growth of 0.13%, while Indian Oil's is 0.49%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hindustan Petroleum's ROE at 9.09% and Indian Oil's ROE at 9.69%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹392.05 for Hindustan Petroleum and ₹140.30 for Indian Oil. Over the past year, Hindustan Petroleum's prices ranged from ₹237.33 to ₹457.15, with a yearly change of 92.62%. Indian Oil's prices fluctuated between ₹116.60 and ₹196.80, with a yearly change of 68.78%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.