Galp Energia SGPS (OTCMKTS:GLPEY) versus Equinor ASA (NYSE:EQNR) Financial Analysis

Equinor ASA (NYSE:EQNR) and Galp Energia SGPS (OTCMKTS:GLPEY) are both large-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Equinor ASA and Galp Energia SGPS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equinor ASA	5	5	5	1	2.13
Galp Energia SGPS	0	0	0	4	4.00

Equinor ASA presently has a consensus target price of $22.71, indicating a potential downside of 10.24%. Given Equinor ASA’s higher possible upside, analysts plainly believe Equinor ASA is more favorable than Galp Energia SGPS.

Valuation and Earnings

This table compares Equinor ASA and Galp Energia SGPS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equinor ASA	$103.77 billion	0.68	$8.81 billion	$3.16	8.01
Galp Energia SGPS	$22.04 billion	0.58	$1.34 billion	$0.94	9.81

Equinor ASA has higher revenue and earnings than Galp Energia SGPS. Equinor ASA is trading at a lower price-to-earnings ratio than Galp Energia SGPS, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Equinor ASA has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Galp Energia SGPS has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Profitability

This table compares Equinor ASA and Galp Energia SGPS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equinor ASA	8.07%	18.44%	6.04%
Galp Energia SGPS	6.17%	24.38%	8.14%

Insider & Institutional Ownership

5.5% of Equinor ASA shares are owned by institutional investors. 0.0% of Equinor ASA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Equinor ASA pays an annual dividend of $1.22 per share and has a dividend yield of 4.8%. Galp Energia SGPS pays an annual dividend of $0.17 per share and has a dividend yield of 1.8%. Equinor ASA pays out 38.6% of its earnings in the form of a dividend. Galp Energia SGPS pays out 18.1% 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.

Summary

Equinor ASA beats Galp Energia SGPS on 11 of the 17 factors compared between the two stocks.

About Equinor ASA

Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. It operates through Exploration & Production Norway; Exploration & Production International; Exploration & Production USA; Marketing, Midstream & Processing; Renewables; and Other segments. The company also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; trades in power and emissions; operates refineries, terminals and processing, and power plants; and develops low carbon solutions for oil and gas. In addition, it develops carbon capture and storage projects; provides transportation solutions, including pipelines, shipping, trucking, and rail; and develops and explores for renewable energy, such as offshore wind, green hydrogen, and solar power. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was incorporated in 1972 and is headquartered in Stavanger, Norway.

About Galp Energia SGPS

Galp Energia, SGPS, S.A. operates as an integrated energy operator in Portugal and internationally. The company operates through four segments: Upstream, Industrial & Midstream, Commercial, and Renewables and New Business. The Upstream segment engages in the exploration, development, and production of hydrocarbons primarily in Brazil, Mozambique, Namibia, and Angola. The Industrial & Midstream segment owns refineries in Portugal, as well as is involved in activities related to energy management of oil products, gas, and electricity. This segment provides storage and transportation infrastructure for oil and gas products, as well as engages in the sale of electricity to the grid in Portugal and Spain. The Commercial segment is involved in the areas of retail to final business-to-business and business to consumer customers of oil, gas, and electricity. The Renewables and New Business segment is involved in the development of solar and wind power generation projects in Portugal and Spain. In addition, it produces lithium-ion batteries, hydrogen, and biofuels; and operates service stations. Further, the company engages in the reinsurance business. The company was formerly known as Galp Petróleos e Gás de Portugal, SGPS, S.A. and changed its name to Galp Energia, SGPS, S.A. in September 2000. Galp Energia, SGPS, S.A. was incorporated in 1999 and is headquartered in Lisbon, Portugal.