Vaalco Energy (NYSE:EGY – Get Free Report) and Icahn Enterprises (NASDAQ:IEP – Get Free Report) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.
Volatility and Risk
Vaalco Energy has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Icahn Enterprises has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.
Valuation and Earnings
This table compares Vaalco Energy and Icahn Enterprises”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vaalco Energy | $419.87 million | 1.57 | -$41.39 million | ($1.06) | -5.90 |
| Icahn Enterprises | $10.54 billion | 0.45 | -$299.00 million | ($0.74) | -9.03 |
Vaalco Energy has higher earnings, but lower revenue than Icahn Enterprises. Icahn Enterprises is trading at a lower price-to-earnings ratio than Vaalco Energy, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Vaalco Energy and Icahn Enterprises’ 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% |
| Icahn Enterprises | -4.81% | -17.99% | -3.72% |
Institutional & Insider Ownership
50.3% of Vaalco Energy shares are held by institutional investors. Comparatively, 87.1% of Icahn Enterprises shares are held by institutional investors. 3.0% of Vaalco Energy shares are held by insiders. Comparatively, 90.1% of Icahn Enterprises shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.0%. Icahn Enterprises pays an annual dividend of $2.00 per share and has a dividend yield of 29.9%. Vaalco Energy pays out -23.6% of its earnings in the form of a dividend. Icahn Enterprises pays out -270.3% 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. Icahn Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of current ratings and price targets for Vaalco Energy and Icahn Enterprises, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vaalco Energy | 1 | 1 | 0 | 0 | 1.50 |
| Icahn Enterprises | 1 | 0 | 0 | 0 | 1.00 |
Vaalco Energy presently has a consensus price target of $7.30, indicating a potential upside of 16.71%. Given Vaalco Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Vaalco Energy is more favorable than Icahn Enterprises.
Summary
Icahn Enterprises beats Vaalco Energy on 9 of the 15 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 Icahn Enterprises
Icahn Enterprises L.P., through its subsidiaries, engages in the investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The Investment segment invests its proprietary capital through various private investment funds. This segment provides investment advisory and other related services. The Energy segment refines and markets transportation fuels in the form of gasoline and diesel fuels, as well as renewable diesel; and manufactures nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The Automotive segment sells automotive parts and materials, and retailed merchandise; offers automotive repair and maintenance services; and leases real estate properties. The Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings that are used to prepare and package processed meat products. The Real Estate segment is involved in the leasing of land, retail, office, and industrial properties; the development and sale of single-family homes; and the operation of country clubs. The Home Fashion segment manufactures, sources, markets, distributes, and sells home fashion consumer products. The Pharma segment offers pharmaceutical products and services. The company was incorporated in 1987 and is headquartered in Sunny Isles Beach, Florida.
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