Encana (NYSE:ECA) and Deep Well Oil & Gas (OTCMKTS:DWOG) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Encana and Deep Well Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Encana 16.84% 10.12% 4.77%
Deep Well Oil & Gas N/A -1.04% -1.02%

Analyst Recommendations

This is a summary of recent ratings for Encana and Deep Well Oil & Gas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Encana 2 10 11 0 2.39
Deep Well Oil & Gas 0 0 0 0 N/A

Encana currently has a consensus price target of $7.40, indicating a potential upside of 74.94%. Given Encana’s higher probable upside, equities research analysts plainly believe Encana is more favorable than Deep Well Oil & Gas.

Risk and Volatility

Encana has a beta of 2.01, meaning that its stock price is 101% more volatile than the S&P 500. Comparatively, Deep Well Oil & Gas has a beta of 2.11, meaning that its stock price is 111% more volatile than the S&P 500.

Institutional and Insider Ownership

74.1% of Encana shares are held by institutional investors. 0.1% of Encana shares are held by company insiders. Comparatively, 55.4% of Deep Well Oil & Gas shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Encana and Deep Well Oil & Gas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Encana $5.94 billion 0.93 $1.07 billion $0.86 4.92
Deep Well Oil & Gas N/A N/A -$330,000.00 N/A N/A

Encana has higher revenue and earnings than Deep Well Oil & Gas.

Summary

Encana beats Deep Well Oil & Gas on 8 of the 10 factors compared between the two stocks.

About Encana

Encana Corporation, together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. It holds interests in various assets, including the Montney in northeast British Columbia and northwest Alberta; Duvernay in west central Alberta; and other upstream operations comprising Wheatland in southern Alberta, Horn River in northeast British Columbia, and Deep Panuke located in offshore Nova Scotia in Canada. The company also owns interests in assets consisting of the Eagle Ford in south Texas and Permian in west Texas. It primarily markets its products to refiners, local distributing companies, energy marketing companies, and electronic exchanges. The company was founded in 1971 and is based in Calgary, Canada.

About Deep Well Oil & Gas

Deep Well Oil & Gas, Inc., together with its subsidiaries, operates as an independent junior oil sands exploration and development company in Canada. The company is involved in exploring for, developing, producing, and selling crude oil. It has a 90% working interest in 6 oil sands leases; a 100% working interest in 1 oil sand lease; and a 25% working interest in 2 oil sands leases in the Peace River oil sands area of North Central Alberta, Canada. Its leases cover approximately 37,322 gross acres. The company was formerly known as Allied Devices Corporation and changed its name to Deep Well Oil & Gas, Inc. in September 2003. Deep Well Oil & Gas, Inc. was founded in 1988 and is headquartered in Edmonton, Canada.

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