Vaalco Energy (NYSE:EGY – Get Free Report) and ConocoPhillips (NYSE:COP – Get Free Report) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.
Insider and Institutional Ownership
50.3% of Vaalco Energy shares are held by institutional investors. Comparatively, 82.4% of ConocoPhillips shares are held by institutional investors. 3.0% of Vaalco Energy shares are held by insiders. Comparatively, 0.1% of ConocoPhillips shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Dividends
Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.6%. ConocoPhillips pays an annual dividend of $3.36 per share and has a dividend yield of 2.5%. Vaalco Energy pays out -17.2% of its earnings in the form of a dividend. ConocoPhillips pays out 44.4% 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. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent recommendations for Vaalco Energy and ConocoPhillips, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vaalco Energy | 0 | 2 | 0 | 0 | 2.00 |
| ConocoPhillips | 1 | 8 | 17 | 2 | 2.71 |
Vaalco Energy presently has a consensus target price of $7.30, indicating a potential upside of 35.56%. ConocoPhillips has a consensus target price of $145.04, indicating a potential upside of 6.35%. Given Vaalco Energy’s higher possible upside, research analysts clearly believe Vaalco Energy is more favorable than ConocoPhillips.
Profitability
This table compares Vaalco Energy and ConocoPhillips’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vaalco Energy | -31.11% | -14.36% | -6.41% |
| ConocoPhillips | 14.22% | 14.72% | 7.77% |
Volatility & Risk
Vaalco Energy has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.
Earnings and Valuation
This table compares Vaalco Energy and ConocoPhillips”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vaalco Energy | $359.27 million | 1.58 | -$41.39 million | ($1.45) | -3.71 |
| ConocoPhillips | $61.55 billion | 2.66 | $7.99 billion | $7.56 | 18.04 |
ConocoPhillips has higher revenue and earnings than Vaalco Energy. Vaalco Energy is trading at a lower price-to-earnings ratio than ConocoPhillips, indicating that it is currently the more affordable of the two stocks.
Summary
ConocoPhillips beats Vaalco Energy on 12 of the 17 factors compared between the two stocks.
About Vaalco Energy
VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.
About ConocoPhillips
ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.
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