TransGlobe Energy (TGA) and Murphy Oil (MUR) Critical Survey

TransGlobe Energy (NASDAQ: TGA) and Murphy Oil (NYSE:MUR) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Earnings & Valuation

This table compares TransGlobe Energy and Murphy Oil’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TransGlobe Energy $122.36 million 0.87 -$87.66 million ($1.54) -0.96
Murphy Oil $1.87 billion 3.16 -$275.97 million ($0.51) -67.25

TransGlobe Energy has higher earnings, but lower revenue than Murphy Oil. Murphy Oil is trading at a lower price-to-earnings ratio than TransGlobe Energy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

TransGlobe Energy has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Murphy Oil has a beta of 2.24, suggesting that its share price is 124% more volatile than the S&P 500.

Institutional & Insider Ownership

17.9% of TransGlobe Energy shares are held by institutional investors. Comparatively, 96.8% of Murphy Oil shares are held by institutional investors. 4.0% of TransGlobe Energy shares are held by company insiders. Comparatively, 6.9% of Murphy Oil shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares TransGlobe Energy and Murphy Oil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransGlobe Energy -83.42% -7.08% -4.70%
Murphy Oil -4.15% -1.25% -0.61%

Analyst Recommendations

This is a summary of recent ratings and price targets for TransGlobe Energy and Murphy Oil, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransGlobe Energy 0 1 0 0 2.00
Murphy Oil 1 8 1 0 2.00

Murphy Oil has a consensus price target of $30.50, indicating a potential downside of 11.08%. Given Murphy Oil’s higher possible upside, analysts clearly believe Murphy Oil is more favorable than TransGlobe Energy.

Dividends

Murphy Oil pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. TransGlobe Energy does not pay a dividend. Murphy Oil pays out -196.1% of its earnings in the form of a dividend.

Summary

Murphy Oil beats TransGlobe Energy on 13 of the 15 factors compared between the two stocks.

About TransGlobe Energy

TransGlobe Energy Corporation is an oil exploration and production company. The Company’s activities are concentrated in the Arab Republic of Egypt (Egypt). The Company conducts its operations through the Arab Republic of Egypt segment. The Company is primarily engaged in oil exploration, development, production and the acquisition of properties. It holds interests in various production sharing concessions (PSC) in Eastern Desert Egypt and Western Desert Egypt. Its blocks in Eastern Desert Egypt include West Gharib, which covers approximately 34,860 acres; West Bakr, covering over 11,600 acres; North West (NW) Gharib, covering approximately 162,000 acres; South East (SE) Gharib, which covers over 125,650 acres, and South West (SW) Gharib, covering approximately 48,310 acres. Its blocks in the Western Desert Egypt include South Alamein, covering approximately 335,830 acres; South Ghazalat, covering over 465,300 acres, and North West (NW) Sitra, covering approximately 480,850 acres.

About Murphy Oil

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company’s exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy’s principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

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