Reviewing EOG Resources (NYSE:EOG) and China Shenhua Energy (OTCMKTS:CSUAY)

China Shenhua Energy (OTCMKTS:CSUAY) and EOG Resources (NYSE:EOG) are both large-cap energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Risk & Volatility

China Shenhua Energy has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500. Comparatively, EOG Resources has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for China Shenhua Energy and EOG Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Shenhua Energy	0	1	0	0	2.00
EOG Resources	0	17	9	2	2.46

EOG Resources has a consensus target price of $161.24, indicating a potential upside of 0.25%. Given EOG Resources’ stronger consensus rating and higher probable upside, analysts plainly believe EOG Resources is more favorable than China Shenhua Energy.

Insider and Institutional Ownership

89.9% of EOG Resources shares are owned by institutional investors. 0.1% of EOG Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares China Shenhua Energy and EOG Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Shenhua Energy	15.92%	11.40%	7.77%
EOG Resources	25.44%	23.44%	13.58%

Valuation and Earnings

This table compares China Shenhua Energy and EOG Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Shenhua Energy	$41.03 billion	2.55	$7.54 billion	$1.65	12.74
EOG Resources	$22.63 billion	3.73	$4.98 billion	$12.85	12.52

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

Dividends

China Shenhua Energy pays an annual dividend of $0.91 per share and has a dividend yield of 4.3%. EOG Resources pays an annual dividend of $4.08 per share and has a dividend yield of 2.5%. China Shenhua Energy pays out 55.2% of its earnings in the form of a dividend. EOG Resources pays out 31.8% 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. EOG Resources has increased its dividend for 8 consecutive years.

Summary

EOG Resources beats China Shenhua Energy on 14 of the 18 factors compared between the two stocks.

About China Shenhua Energy

China Shenhua Energy Company Limited, together with its subsidiaries, engages in the production and sale of coal and power; railway, port, and shipping transportation; and coal-to-olefins businesses in the People's Republic of China and internationally. It operates through six segments: Coal, Power Generation, Railway, Port, Shipping, and Coal Chemical. The Coal segment produces coal from surface and underground mines; and sells coal to power plants and metallurgical and coal chemical producers. The Power segment generates electric power through thermal, wind, water, and gas; and sells electric power to power grid companies. The Railway segment provides railway transportation services. The Port segment offers loading, transportation, and storage services. The Shipping segment provides shipment transportation services. The Coal Chemical segment produces and sells methanol; and polyethylene and polypropylene, as well as other by-products. The company was incorporated in 2004 and is based in Beijing, the People's Republic of China. China Shenhua Energy Company Limited operates as a subsidiary of China Energy Investment Corporation Limited.

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.