Cenovus Energy (NYSE: CVE) and Sprague Resources (NYSE:SRLP) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Institutional & Insider Ownership

55.8% of Cenovus Energy shares are held by institutional investors. Comparatively, 25.9% of Sprague Resources shares are held 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.

Profitability

This table compares Cenovus Energy and Sprague Resources’ 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%
Sprague Resources 1.77% 29.64% 4.95%

Risk & Volatility

Cenovus Energy has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Sprague Resources has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Dividends

Cenovus Energy pays an annual dividend of $0.15 per share and has a dividend yield of 2.0%. Sprague Resources pays an annual dividend of $2.43 per share and has a dividend yield of 9.5%. Cenovus Energy pays out 8.3% of its earnings in the form of a dividend. Sprague Resources pays out 119.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprague Resources has increased its dividend for 2 consecutive years. Sprague Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Cenovus Energy and Sprague Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cenovus Energy $11.79 billion 0.77 $1.75 billion $1.80 4.12
Sprague Resources $2.62 billion 0.22 $105.38 million $2.03 12.61

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

Analyst Ratings

This is a summary of recent ratings and price targets for Cenovus Energy and Sprague Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cenovus Energy 2 5 7 0 2.36
Sprague Resources 0 0 2 0 3.00

Cenovus Energy presently has a consensus price target of $18.92, indicating a potential upside of 154.94%. Sprague Resources has a consensus price target of $33.00, indicating a potential upside of 28.91%. Given Cenovus Energy’s higher probable upside, equities analysts clearly believe Cenovus Energy is more favorable than Sprague Resources.

Summary

Cenovus Energy beats Sprague Resources on 9 of the 16 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 Sprague Resources

Sprague Resources LP is engaged in the purchase, storage, distribution and sale of refined products and natural gas, and provides storage and handling services for a range of materials. The Company operates through four segments: refined products, which purchases a range of refined products, such as heating oil, diesel fuel, residual fuel oil, asphalt, kerosene, jet fuel and gasoline from refining companies, trading organizations and producers; natural gas, which purchases natural gas from natural gas producers and trading companies, and sells and distributes natural gas to commercial and industrial customers in the Northeast and Mid-Atlantic United States; materials handling, which offloads, stores and prepares for delivery a range of customer-owned products, including asphalt, clay slurry, coal and heavy equipment, and other operations, which include the purchase and distribution of coal, certain commercial trucking activities and the heating equipment service business.

Receive News & Stock Ratings for Cenovus Energy Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cenovus Energy Inc and related stocks with our FREE daily email newsletter.