Reviewing Baytex Energy (NYSE:BTE) & Ovintiv (NYSE:OVV)

Baytex Energy (NYSE:BTE) and Ovintiv (NYSE:OVV) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Insider and Institutional Ownership

46.2% of Baytex Energy shares are held by institutional investors. Comparatively, 83.8% of Ovintiv shares are held by institutional investors. 0.8% of Baytex Energy shares are held by insiders. Comparatively, 0.9% of Ovintiv shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Baytex Energy has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Ovintiv has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Dividends

Baytex Energy pays an annual dividend of $0.07 per share and has a dividend yield of 1.8%. Ovintiv pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Baytex Energy pays out -10.0% of its earnings in the form of a dividend. Ovintiv pays out 38.7% 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. Ovintiv has raised its dividend for 4 consecutive years. Ovintiv is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Baytex Energy and Ovintiv, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baytex Energy	1	6	3	1	2.36
Ovintiv	0	6	15	1	2.77

Ovintiv has a consensus target price of $64.47, suggesting a potential upside of 21.46%. Given Ovintiv’s stronger consensus rating and higher probable upside, analysts plainly believe Ovintiv is more favorable than Baytex Energy.

Valuation & Earnings

This table compares Baytex Energy and Ovintiv”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baytex Energy	$2.56 billion	1.11	-$432.12 million	($0.70)	-5.71
Ovintiv	$8.91 billion	1.67	$1.24 billion	$3.10	17.12

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

Profitability

This table compares Baytex Energy and Ovintiv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baytex Energy	-24.25%	-10.85%	-6.38%
Ovintiv	8.51%	13.14%	6.96%

Summary

Ovintiv beats Baytex Energy on 16 of the 17 factors compared between the two stocks.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.

About Ovintiv

Ovintiv Inc., together with its subsidiaries, explores, develops, produces, and markets natural gas, oil, and natural gas liquids in the United States and Canada. The company operates through USA Operations, Canadian Operations, and Market Optimization segments. Its principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. In addition, the company's upstream assets comprise Bakken in northwest North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. was incorporated in 2020 and is based in Denver, Colorado.