Head-To-Head Comparison: Teekay Tankers (NYSE:TNK) versus Vaalco Energy (NYSE:EGY)

Teekay Tankers (NYSE:TNK) and Vaalco Energy (NYSE:EGY) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Institutional and Insider Ownership

52.7% of Teekay Tankers shares are owned by institutional investors. Comparatively, 50.3% of Vaalco Energy shares are owned by institutional investors. 1.9% of Teekay Tankers shares are owned by insiders. Comparatively, 3.0% of Vaalco Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Teekay Tankers and Vaalco Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teekay Tankers	1	3	2	0	2.17
Vaalco Energy	0	2	0	0	2.00

Teekay Tankers currently has a consensus target price of $95.50, indicating a potential upside of 12.07%. Vaalco Energy has a consensus target price of $7.30, indicating a potential upside of 35.56%. Given Vaalco Energy’s higher possible upside, analysts clearly believe Vaalco Energy is more favorable than Teekay Tankers.

Valuation and Earnings

This table compares Teekay Tankers and Vaalco Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teekay Tankers	$951.80 million	3.09	$351.19 million	$16.97	5.02
Vaalco Energy	$359.27 million	1.58	-$41.39 million	($1.45)	-3.71

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

Dividends

Teekay Tankers pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.6%. Teekay Tankers pays out 5.9% of its earnings in the form of a dividend. Vaalco Energy pays out -17.2% 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. Teekay Tankers has raised its dividend for 2 consecutive years. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Teekay Tankers and Vaalco Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Teekay Tankers	51.35%	22.11%	20.23%
Vaalco Energy	-31.11%	-14.36%	-6.41%

Volatility and Risk

Teekay Tankers has a beta of -0.05, suggesting that its share price is 105% less volatile than the S&P 500. Comparatively, Vaalco Energy has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Summary

Teekay Tankers beats Vaalco Energy on 11 of the 16 factors compared between the two stocks.

About Teekay Tankers

Teekay Tankers Ltd. provides crude oil and other marine transportation services to oil industries in Bermuda and internationally. The company offers voyage and time charter services; offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products; and tanker commercial and technical management services. It also engages management of vessels, procurement, and equipment rental businesses. Teekay Tankers Ltd. was incorporated in 2007 and is headquartered in Hamilton, Bermuda.

About Vaalco Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.