Vermilion Energy (VET) versus Bill Barrett (BBG) Critical Survey

Vermilion Energy (NYSE: VET) and Bill Barrett (NYSE:BBG) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Valuation & Earnings

This table compares Vermilion Energy and Bill Barrett’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vermilion Energy $666.64 million 7.16 -$120.87 million $0.30 130.70
Bill Barrett $178.82 million 2.17 -$170.37 million ($1.61) -3.16

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

Dividends

Vermilion Energy pays an annual dividend of $2.08 per share and has a dividend yield of 5.3%. Bill Barrett does not pay a dividend. Vermilion Energy pays out 693.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Vermilion Energy and Bill Barrett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vermilion Energy 4.45% 3.92% 1.56%
Bill Barrett -49.61% -7.59% -3.05%

Insider & Institutional Ownership

54.2% of Vermilion Energy shares are held by institutional investors. Comparatively, 85.7% of Bill Barrett shares are held by institutional investors. 2.7% of Bill Barrett shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Vermilion Energy has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Bill Barrett has a beta of 3.6, indicating that its stock price is 260% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Vermilion Energy and Bill Barrett, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vermilion Energy 0 0 3 0 3.00
Bill Barrett 0 7 6 0 2.46

Vermilion Energy presently has a consensus price target of $52.25, suggesting a potential upside of 33.26%. Bill Barrett has a consensus price target of $6.63, suggesting a potential upside of 30.41%. Given Vermilion Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Vermilion Energy is more favorable than Bill Barrett.

Summary

Vermilion Energy beats Bill Barrett on 11 of the 16 factors compared between the two stocks.

Vermilion Energy Company Profile

Vermilion Energy Inc. produces oil and gas, and focuses on the acquisition, development and optimization of producing properties in North America, the Europe and Australia. Its segments include Canada, which includes production and assets focused in West Pembina near Drayton Valley, Alberta and Northgate in southeast Saskatchewan; France, which produces oil in France; Netherlands, which produces onshore gas and interests include over 24 onshore licenses and two offshore licenses; Germany, which holds interest in a four partner consortium; Ireland, which includes a non-operating interest in the offshore Corrib gas field located approximately 83 kilometers off the northwest coast of Ireland; Australia, which holds an operated working interest in the Wandoo field located approximately 80 kilometers offshore on the northwest shelf of Australia; the United States, which has interests in approximately 97,200 net acres of land in the Powder River Basin of northeastern Wyoming, and Corporate.

Bill Barrett Company Profile

Bill Barrett Corporation is an independent energy company that develops, acquires and explores for oil and natural gas resources. The Company’s assets and operations are located in the Rocky Mountain region of the United States. It has over two areas of production: The Denver-Julesburg Basin (DJ Basin) and the Uinta Oil Program in the Uinta Basin. Its acreage positions in the DJ Basin are located in Colorado’s eastern plains and parts of southeastern Wyoming. It had interests in 299 gross producing wells and served as an operator in 202 gross wells, as of December 31, 2016. The Uinta Basin is located in northeastern Utah. Uinta Basin’s estimated proved reserves are 21.4 million barrels of oil equivalent (MMBoe). Uinta Basin has interests in approximately 240 gross producing wells. The Company serves as an operator in over 170 gross wells. The Uinta Oil Program includes over three areas of development located in the basin referred as Blacktail Ridge, Lake Canyon and East Bluebell.

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