Equinor ASA (EQNR) versus Hess (HES) Critical Contrast

Equinor ASA (NYSE: EQNR) and Hess (NYSE:HES) are both large-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Dividends

Equinor ASA pays an annual dividend of $0.67 per share and has a dividend yield of 2.4%. Hess pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Equinor ASA pays out 48.6% of its earnings in the form of a dividend. Hess pays out -21.7% 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.

Insider & Institutional Ownership

4.8% of Equinor ASA shares are owned by institutional investors. Comparatively, 94.9% of Hess shares are owned by institutional investors. 12.1% of Hess shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Equinor ASA and Hess, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equinor ASA 0 2 1 0 2.33
Hess 3 9 3 0 2.00

Hess has a consensus target price of $52.66, indicating a potential downside of 24.34%. Given Hess’ higher possible upside, analysts clearly believe Hess is more favorable than Equinor ASA.

Profitability

This table compares Equinor ASA and Hess’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equinor ASA 7.34% 12.32% 4.36%
Hess -69.10% -8.54% -4.62%

Risk & Volatility

Equinor ASA has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Hess has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Earnings & Valuation

This table compares Equinor ASA and Hess’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equinor ASA $61.19 billion 1.52 $4.59 billion $1.38 20.23
Hess $5.41 billion 3.86 -$4.07 billion ($4.61) -15.10

Equinor ASA has higher revenue and earnings than Hess. Hess is trading at a lower price-to-earnings ratio than Equinor ASA, indicating that it is currently the more affordable of the two stocks.

Summary

Equinor ASA beats Hess on 9 of the 16 factors compared between the two stocks.

About Equinor ASA

Equinor ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development & Production Norway; Development & Production USA; Development & Production International; Marketing, Midstream & Processing; New Energy Solutions; Technology, Projects & Drilling; Exploration; and Global Strategy & Business Development segments. It also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; markets and trades in electricity and emission rights; and operates refineries, processing and power plants, and terminals. In addition, the company develops wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2017, it had proved oil and gas reserves of 5,367 million barrels of oil equivalent. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About Hess

Hess Corporation, an exploration and production company, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. It operates through two segments, Exploration and Production, and Midstream. The company conducts production operations primarily in the United States, Denmark, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities primarily offshore Guyana, Suriname, Canada, and in the Gulf of Mexico. As of December 31, 2017, it had total proved reserves of 1,154 million barrels of oil equivalent. The company is also involved in crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and natural gas liquids, and the storage and terminaling of propane primarily in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota. The company was founded in 1920 and is headquartered in New York, New York.

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