InterOil (NYSE: IOC) and Royal Dutch Shell PLC (NYSE:RDS.A) are both mid-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Risk and Volatility

InterOil has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Royal Dutch Shell PLC has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares InterOil and Royal Dutch Shell PLC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InterOil N/A N/A N/A ($3.70) -13.07
Royal Dutch Shell PLC N/A N/A N/A $1.96 N/A

InterOil is trading at a lower price-to-earnings ratio than Royal Dutch Shell PLC, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

46.6% of InterOil shares are held by institutional investors. Comparatively, 6.3% of Royal Dutch Shell PLC shares are held by institutional investors. 1.0% of Royal Dutch Shell PLC shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Royal Dutch Shell PLC pays an annual dividend of $3.20 per share. InterOil does not pay a dividend. Royal Dutch Shell PLC pays out 163.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and price targets for InterOil and Royal Dutch Shell PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterOil 0 0 0 0 N/A
Royal Dutch Shell PLC 2 3 11 0 2.56

Royal Dutch Shell PLC has a consensus target price of $57.00, indicating a potential upside of Infinity. Given Royal Dutch Shell PLC’s higher probable upside, analysts plainly believe Royal Dutch Shell PLC is more favorable than InterOil.

Profitability

This table compares InterOil and Royal Dutch Shell PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
InterOil -233.48% -14.08% -8.85%
Royal Dutch Shell PLC 2.91% 6.04% 2.80%

Summary

Royal Dutch Shell PLC beats InterOil on 7 of the 10 factors compared between the two stocks.

About InterOil

InterOil Corporation (InterOil) is an oil and gas business with a sole focus on Papua New Guinea (PNG). The Company’s segments include Upstream and Corporate. The Upstream segment includes exploration, appraisal and development of hydrocarbon structures in PNG. The Corporate segment provides support to the Company’s other business segments through business development and improvement activities, general services, administration, human resources, executive management, financing and treasury, government affairs and investor relations. InterOil holds interests across over four exploration and approximately two production retention licenses in the Eastern Papuan Basin of Papua New Guinea. Its assets include the Elk, Antelope, Triceratops, Raptor and Bobcat fields in the Gulf Province of Papua New Guinea, and exploration licenses covering approximately 16,000 square kilometers (over four million acres) in Papua New Guinea.

About Royal Dutch Shell PLC

The Royal Dutch Shell plc explores for crude oil and natural gas around the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company’s segments include Integrated Gas, Upstream, Downstream and Corporate. The Integrated Gas segment is engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products, as well as projects with an integrated activity, ranging from producing to commercializing gas. The Upstream segment includes the operations of Upstream, which is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids, and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen from mined oil sands and conversion into synthetic crude oil. The Downstream segment is engaged in oil products and chemicals manufacturing, and marketing activities.

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