ConocoPhillips (NYSE:COP) versus Canadian Natural Resources (NYSE:CNQ) Financial Contrast

Canadian Natural Resources (NYSE:CNQ) and ConocoPhillips (NYSE:COP) are both large-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Volatility and Risk

Canadian Natural Resources has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Canadian Natural Resources and ConocoPhillips, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	5	7	0	2.58
ConocoPhillips	2	8	17	1	2.61

Canadian Natural Resources presently has a consensus target price of $57.00, indicating a potential upside of 20.84%. ConocoPhillips has a consensus target price of $141.24, indicating a potential upside of 12.62%. Given Canadian Natural Resources’ higher possible upside, analysts plainly believe Canadian Natural Resources is more favorable than ConocoPhillips.

Valuation and Earnings

This table compares Canadian Natural Resources and ConocoPhillips”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$31.61 billion	3.08	$7.74 billion	$4.05	11.65
ConocoPhillips	$63.34 billion	2.38	$7.99 billion	$7.56	16.59

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

Profitability

This table compares Canadian Natural Resources and ConocoPhillips’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	22.78%	23.91%	11.45%
ConocoPhillips	14.22%	14.72%	7.77%

Dividends

Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.8%. ConocoPhillips pays an annual dividend of $3.36 per share and has a dividend yield of 2.7%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. ConocoPhillips pays out 44.4% 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. Canadian Natural Resources has increased its dividend for 24 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

74.0% of Canadian Natural Resources shares are held by institutional investors. Comparatively, 82.4% of ConocoPhillips shares are held by institutional investors. 5.0% of Canadian Natural Resources shares are held by insiders. Comparatively, 0.1% of ConocoPhillips shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

About ConocoPhillips

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.