Ecopetrol (NYSE: EC) and InterOil (NYSE:IOC) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ecopetrol and InterOil, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecopetrol 0 3 2 0 2.40
InterOil 0 0 0 0 N/A

Ecopetrol currently has a consensus price target of $10.33, indicating a potential upside of 8.20%. Given Ecopetrol’s higher probable upside, analysts clearly believe Ecopetrol is more favorable than InterOil.

Profitability

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

Net Margins Return on Equity Return on Assets
Ecopetrol 5.04% 3.60% 1.34%
InterOil -233.48% -14.08% -8.85%

Dividends

Ecopetrol pays an annual dividend of $0.16 per share and has a dividend yield of 1.7%. InterOil does not pay a dividend. Ecopetrol pays out 36.4% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Ecopetrol and InterOil’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecopetrol $17.94 billion 1.09 $6.95 billion $0.44 21.71
InterOil N/A N/A N/A ($3.70) -13.07

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

Insider & Institutional Ownership

2.1% of Ecopetrol shares are owned by institutional investors. Comparatively, 46.6% of InterOil shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Ecopetrol has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, InterOil has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Summary

Ecopetrol beats InterOil on 8 of the 11 factors compared between the two stocks.

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.

About InterOil

InterOil Corporation (InterOil) is an oil and gas business with a sole focus on Papua New Guinea (PNG). The Company’s segments include Upstream and Corporate. The Upstream segment includes exploration, appraisal and development of hydrocarbon structures in PNG. The Corporate segment provides support to the Company’s other business segments through business development and improvement activities, general services, administration, human resources, executive management, financing and treasury, government affairs and investor relations. InterOil holds interests across over four exploration and approximately two production retention licenses in the Eastern Papuan Basin of Papua New Guinea. Its assets include the Elk, Antelope, Triceratops, Raptor and Bobcat fields in the Gulf Province of Papua New Guinea, and exploration licenses covering approximately 16,000 square kilometers (over four million acres) in Papua New Guinea.

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