Talos Energy (NYSE:TALO) & Equinor ASA (NYSE:EQNR) Critical Review

Equinor ASA (NYSE:EQNR) and Talos Energy (NYSE:TALO) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Equinor ASA and Talos Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equinor ASA	7.92%	23.60%	7.21%
Talos Energy	-20.46%	-1.94%	-0.75%

Analyst Recommendations

This is a summary of current ratings for Equinor ASA and Talos Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equinor ASA	1	8	2	2	2.38
Talos Energy	1	3	5	1	2.60

Equinor ASA presently has a consensus target price of $43.47, suggesting a potential upside of 4.50%. Talos Energy has a consensus target price of $19.00, suggesting a potential upside of 16.89%. Given Talos Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Talos Energy is more favorable than Equinor ASA.

Institutional and Insider Ownership

5.5% of Equinor ASA shares are owned by institutional investors. Comparatively, 89.3% of Talos Energy shares are owned by institutional investors. 0.0% of Equinor ASA shares are owned by company insiders. Comparatively, 0.5% of Talos Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Equinor ASA has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500. Comparatively, Talos Energy has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500.

Earnings & Valuation

This table compares Equinor ASA and Talos Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equinor ASA	$113.65 billion	0.87	$5.04 billion	$3.67	11.33
Talos Energy	$1.98 billion	1.37	-$494.29 million	($2.38)	-6.83

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

Summary

Equinor ASA beats Talos Energy on 8 of the 15 factors compared between the two stocks.

About Equinor ASA

Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. It operates through Exploration & Production Norway; Exploration & Production International; Exploration & Production USA; Marketing, Midstream & Processing; Renewables; and Other segments. The company also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; trades in power and emissions; operates refineries, terminals and processing, and power plants; and develops low carbon solutions for oil and gas. In addition, it develops carbon capture and storage projects; provides transportation solutions, including pipelines, shipping, trucking, and rail; and develops and explores for renewable energy, such as offshore wind, green hydrogen, and solar power. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was incorporated in 1972 and is headquartered in Stavanger, Norway.

About Talos Energy

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.