Statoil ASA (NYSE: STO) and Ecopetrol (NYSE:EC) are both large-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitabiliy and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Statoil ASA and Ecopetrol, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil ASA 3 4 5 0 2.17
Ecopetrol 0 3 2 0 2.40

Statoil ASA currently has a consensus target price of $18.50, indicating a potential upside of 0.22%. Ecopetrol has a consensus target price of $10.33, indicating a potential upside of 13.30%. Given Ecopetrol’s stronger consensus rating and higher probable upside, analysts clearly believe Ecopetrol is more favorable than Statoil ASA.

Profitability

This table compares Statoil ASA and Ecopetrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil ASA -1.32% 5.61% 1.93%
Ecopetrol 4.06% 2.95% 1.09%

Institutional & Insider Ownership

5.0% of Statoil ASA shares are owned by institutional investors. Comparatively, 2.2% of Ecopetrol shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Statoil ASA pays an annual dividend of $0.92 per share and has a dividend yield of 5.0%. Ecopetrol pays an annual dividend of $0.16 per share and has a dividend yield of 1.8%. Statoil ASA pays out -383.3% of its earnings in the form of a dividend. Ecopetrol pays out 64.0% 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. Statoil ASA has increased its dividend for 4 consecutive years. Statoil ASA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Statoil ASA has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Earnings and Valuation

This table compares Statoil ASA and Ecopetrol’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Statoil ASA $55.12 billion 1.08 $18.51 billion ($0.24) -76.91
Ecopetrol $16.95 billion 1.11 $6.42 billion $0.25 36.48

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

Summary

Statoil ASA beats Ecopetrol on 9 of the 15 factors compared between the two stocks.

About Statoil ASA

Statoil ASA (Statoil) is an energy company. The Company is engaged in oil and gas exploration and production activities. The Company’s segments include Development and Production Norway (DPN), Development and Production International (DPI), Marketing, Midstream and Processing (MMP) and Other. DPN segment manages the Company’s upstream activities on the Norwegian continental shelf (NCS) and explores for and extracts crude oil, natural gas and natural gas liquids. DPI segment manages the Company’s upstream activities that are not included in the DPN and Development and Production USA (DPUSA) business areas. MMP segment manages its marketing and trading activities related to oil products and natural gas, transportation, processing and manufacturing, and the development of oil and gas. Other segment includes activities in New Energy Solutions (NES), Technology, Projects and Drilling (TPD), Global Strategy and Business Development (GSB), and Corporate staffs and support functions.

About Ecopetrol

Ecopetrol S.A. is an oil company. The Company operates in Colombia, Peru, Brazil and the United States Gulf Coast. The Company’s segments include Exploration and Production, Transportation and Logistics, and Refining, Petrochemicals and Biofuels. The Company’s Exploration and Production segment includes exploration, development and production activities in Colombia and abroad. The Company’s Transportation and Logistics segment includes the transportation of crude oil, motor fuels, fuel oil and other refined products, including diesel and biofuels. The Company’s main crude oil pipeline systems’ operating capacity is approximately 1.34 million barrels per day (BPD). The Company’s main refineries are the Barrancabermeja refinery, which it directly owns and operates, and a refinery in the Free Trade Zone in Cartagena that is operated by Reficar S.A., a subsidiary of the Company. The Company also owns and operates two other minor refineries: Orito and Apiay.

Receive News & Ratings for Statoil ASA Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Statoil ASA and related companies with MarketBeat.com's FREE daily email newsletter.