ENI S.p.A. (NYSE: E) and Ecopetrol (NYSE:EC) are both large-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitabiliy and analyst recommendations.

Institutional and Insider Ownership

1.7% of ENI S.p.A. shares are owned by institutional investors. Comparatively, 2.2% of Ecopetrol shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

ENI S.p.A. has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ENI S.p.A. and Ecopetrol, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ENI S.p.A. 4 2 4 0 2.00
Ecopetrol 0 3 2 0 2.40

Ecopetrol has a consensus target price of $10.33, indicating a potential upside of 14.05%. Given Ecopetrol’s stronger consensus rating and higher possible upside, analysts plainly believe Ecopetrol is more favorable than ENI S.p.A..

Valuation and Earnings

This table compares ENI S.p.A. and Ecopetrol’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ENI S.p.A. $69.38 billion 0.79 $11.45 billion $0.14 217.73
Ecopetrol $16.95 billion 1.10 $6.42 billion $0.25 36.24

ENI S.p.A. has higher revenue and earnings than Ecopetrol. Ecopetrol is trading at a lower price-to-earnings ratio than ENI S.p.A., indicating that it is currently the more affordable of the two stocks.

Dividends

ENI S.p.A. pays an annual dividend of $1.27 per share and has a dividend yield of 4.2%. Ecopetrol pays an annual dividend of $0.16 per share and has a dividend yield of 1.8%. ENI S.p.A. pays out 907.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ecopetrol pays out 64.0% of its earnings in the form of a dividend.

Profitability

This table compares ENI S.p.A. and Ecopetrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ENI S.p.A. 0.39% 0.73% 0.31%
Ecopetrol 4.06% 2.95% 1.09%

Summary

Ecopetrol beats ENI S.p.A. on 10 of the 15 factors compared between the two stocks.

ENI S.p.A. Company Profile

Eni SpA (Eni) is engaged in the exploration, development and production of hydrocarbons, in the supply and marketing of gas, liquefied natural gas (LNG) and power, in the refining and marketing of petroleum products, in the production and marketing of basic petrochemicals, plastics and elastomers and in commodity trading. The Company’s segments include Exploration & Production, Gas & Power, and Refining & Marketing. Its Exploration & Production segment engages in oil and natural gas exploration and field development and production, as well as LNG operations in over 40 countries, including Italy, Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Algeria, Australia, Venezuela, Iraq, Ghana and Mozambique. Its Gas & Power segment engages in supply, trading and marketing of gas, LNG and electricity, international gas transport activities and commodity trading and derivatives. As of December 31, 2016, Eni had operations in 73 countries.

Ecopetrol Company Profile

Ecopetrol S.A. is an oil company. The Company operates in Colombia, Peru, Brazil and the United States Gulf Coast. The Company’s segments include Exploration and Production, Transportation and Logistics, and Refining, Petrochemicals and Biofuels. The Company’s Exploration and Production segment includes exploration, development and production activities in Colombia and abroad. The Company’s Transportation and Logistics segment includes the transportation of crude oil, motor fuels, fuel oil and other refined products, including diesel and biofuels. The Company’s main crude oil pipeline systems’ operating capacity is approximately 1.34 million barrels per day (BPD). The Company’s main refineries are the Barrancabermeja refinery, which it directly owns and operates, and a refinery in the Free Trade Zone in Cartagena that is operated by Reficar S.A., a subsidiary of the Company. The Company also owns and operates two other minor refineries: Orito and Apiay.

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