Critical Review: Frontline (NYSE:FRO) versus Inpex (OTCMKTS:IPXHY)

Frontline (NYSE:FRO) and Inpex (OTCMKTS:IPXHY) are both large-cap energy companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Frontline and Inpex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontline	2	5	4	0	2.18
Inpex	0	3	0	0	2.00

Frontline currently has a consensus price target of $45.37, indicating a potential downside of 13.96%. Given Frontline’s stronger consensus rating and higher probable upside, research analysts clearly believe Frontline is more favorable than Inpex.

Dividends

Frontline pays an annual dividend of $10.44 per share and has a dividend yield of 19.8%. Inpex pays an annual dividend of $0.41 per share and has a dividend yield of 1.7%. Frontline pays out 156.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Inpex pays out 17.2% of its earnings in the form of a dividend.

Institutional & Insider Ownership

22.7% of Frontline shares are owned by institutional investors. Comparatively, 0.0% of Inpex shares are owned by institutional investors. 48.1% of Frontline shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Frontline and Inpex”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontline	$1.97 billion	5.95	$379.08 million	$6.67	7.90
Inpex	$13.45 billion	2.08	$2.52 billion	$2.38	9.92

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

Profitability

This table compares Frontline and Inpex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontline	49.47%	44.24%	20.89%
Inpex	21.93%	8.53%	5.51%

Volatility and Risk

Frontline has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Inpex has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Summary

Frontline beats Inpex on 11 of the 16 factors compared between the two stocks.

About Frontline

Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.

About Inpex

Inpex Corporation engages in the research, exploration, development, production, and sale of oil, natural gas, and other mineral resources in Japan, rest of Asia and Oceania, Europe and NIS countries, the Middle East and Africa, and the Americas. The company is involved in the investment and lending to the companies engaged in mineral resources business, etc. It also transports natural gas, as well as operates, manages, and maintains gas pipelines. In addition, the company engages in storage of carbon capture related business. Further, it is involved in hydrogen and ammonia, renewable energy, forest conservation, and carbon recycling related businesses. Inpex Corporation was founded in 1966 and is headquartered in Tokyo, Japan.