Reviewing Baytex Energy (NYSE:BTE) & Ovintiv (NYSE:OVV)

Ovintiv (NYSE:OVV) and Baytex Energy (NYSE:BTE) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Volatility & Risk

Ovintiv has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Baytex Energy has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Insider & Institutional Ownership

83.8% of Ovintiv shares are held by institutional investors. Comparatively, 46.1% of Baytex Energy shares are held by institutional investors. 0.9% of Ovintiv shares are held by insiders. Comparatively, 0.8% of Baytex Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Ovintiv and Baytex Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ovintiv	0	6	15	1	2.77
Baytex Energy	1	6	3	1	2.36

Ovintiv currently has a consensus target price of $64.32, suggesting a potential upside of 21.51%. Given Ovintiv’s stronger consensus rating and higher probable upside, equities analysts clearly believe Ovintiv is more favorable than Baytex Energy.

Dividends

Ovintiv pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Baytex Energy pays an annual dividend of $0.07 per share and has a dividend yield of 1.8%. Ovintiv pays out 38.7% of its earnings in the form of a dividend. Baytex Energy pays out -10.0% 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. Ovintiv has increased its dividend for 4 consecutive years. Ovintiv is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ovintiv and Baytex Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ovintiv	8.51%	13.14%	6.96%
Baytex Energy	-24.25%	-10.85%	-6.38%

Valuation & Earnings

This table compares Ovintiv and Baytex Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ovintiv	$8.91 billion	1.67	$1.24 billion	$3.10	17.07
Baytex Energy	$2.56 billion	1.09	-$432.12 million	($0.70)	-5.58

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

Summary

Ovintiv beats Baytex Energy on 16 of the 17 factors compared between the two stocks.

About Ovintiv

Ovintiv Inc., together with its subsidiaries, explores, develops, produces, and markets natural gas, oil, and natural gas liquids in the United States and Canada. The company operates through USA Operations, Canadian Operations, and Market Optimization segments. Its principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. In addition, the company's upstream assets comprise Bakken in northwest North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. was incorporated in 2020 and is based in Denver, Colorado.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.