Hess Corp. (HES), Murphy Oil Corporation (MUR): Wednesday Is a Big Day for Oil Earnings

Analysts seem to be less bullish on refining/marketing than they are on exploration and production, and as Phillips 66 (NYSE:PSX) is only a refining/marketing play, this is definitely reflected in the company’s valuation. Shares currently trade for just 8.4 times this year’s earnings, but realize that earnings are projected to be flat in the coming years. Phillips 66 also pays the best dividend of the group, currently yielding 2.12%.

Final thoughts

These are three very different plays within the same sector, and the one that’s right for you depends on several factors including your particular risk tolerance, time frame, etc. Currently, I prefer Murphy Oil Corporation (NYSE:MUR) out of the three for a few reasons. First, I want some exposure to exploration & production (sorry Phillips 66 (NYSE:PSX)!), and getting into Murphy pre-spinoff will let me do that and will eventually keep both businesses in my portfolio as separate investments. So, if one of the two businesses produces big gains, I could sell that area of the business while keeping my exposure to the other. That is a big “what if,” but I feel that Murphy offers a great combination of stability and flexibility, and that’s what I like to see in long-term investment prospects.

Of course, one of the best things about earnings season is that the fundamental reasons for choosing one over the other can change overnight. Stay tuned Wednesday to see if any of these three surprises the market and change your opinion.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Wednesday Is a Big Day for Oil Earnings originally appeared on Fool.com.

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