Cenovus Energy (NYSE: CVE) and Royal Dutch Shell PLC (NYSE:RDS.A) are both large-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Ratings

This is a summary of current ratings and target prices for Cenovus Energy and Royal Dutch Shell PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cenovus Energy 2 4 7 0 2.38
Royal Dutch Shell PLC 2 3 11 0 2.56

Cenovus Energy presently has a consensus price target of $18.58, indicating a potential upside of 90.01%. Royal Dutch Shell PLC has a consensus price target of $57.03, indicating a potential upside of Infinity. Given Royal Dutch Shell PLC’s stronger consensus rating and higher probable upside, analysts clearly believe Royal Dutch Shell PLC is more favorable than Cenovus Energy.

Earnings & Valuation

This table compares Cenovus Energy and Royal Dutch Shell PLC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cenovus Energy $12.32 billion 0.98 $1.83 billion $1.80 5.43
Royal Dutch Shell PLC N/A N/A N/A $1.96 N/A

Cenovus Energy has higher revenue and earnings than Royal Dutch Shell PLC. Royal Dutch Shell PLC is trading at a lower price-to-earnings ratio than Cenovus Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Cenovus Energy pays an annual dividend of $0.16 per share and has a dividend yield of 1.6%. Royal Dutch Shell PLC pays an annual dividend of $3.20 per share. Cenovus Energy pays out 8.9% of its earnings in the form of a dividend. Royal Dutch Shell PLC pays out 163.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cenovus Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Cenovus Energy has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Royal Dutch Shell PLC has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Insider & Institutional Ownership

56.2% of Cenovus Energy shares are owned by institutional investors. Comparatively, 6.3% of Royal Dutch Shell PLC shares are owned by institutional investors. 1.0% of Royal Dutch Shell PLC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Cenovus Energy and Royal Dutch Shell PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cenovus Energy 17.89% 3.20% 1.46%
Royal Dutch Shell PLC 2.91% 6.04% 2.80%

Summary

Royal Dutch Shell PLC beats Cenovus Energy on 9 of the 14 factors compared between the two stocks.

About Cenovus Energy

Cenovus Energy Inc is a Canada-based integrated oil company. It operates in the business of developing, producing and marketing crude oil, Natural Gas Liquids (NGLs) and natural gas in Canada. The Company also conducts marketing activities and owns refining interests in the United States (U.S.). Its segments include: Oil Sands, which includes the development and production of bitumen and natural gas in northeast Alberta; Conventional, which includes the development and production of conventional crude oil, NGLs and natural gas in Alberta and Saskatchewan, including the heavy oil assets at Pelican Lake, the carbon dioxide (CO2) enhanced oil recovery (EOR) project at Weyburn and emerging tight oil opportunities; Refining and Marketing, which includes transporting and selling crude oil and natural gas and joint ownership of refineries in the U.S., as well as Corporate and Eliminations.

About Royal Dutch Shell PLC

The Royal Dutch Shell plc explores for crude oil and natural gas around the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company’s segments include Integrated Gas, Upstream, Downstream and Corporate. The Integrated Gas segment is engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products, as well as projects with an integrated activity, ranging from producing to commercializing gas. The Upstream segment includes the operations of Upstream, which is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids, and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen from mined oil sands and conversion into synthetic crude oil. The Downstream segment is engaged in oil products and chemicals manufacturing, and marketing activities.

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