Head to Head Analysis: Cenovus Energy (CVE) & Earthstone Energy (ESTE)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cenovus Energy and Earthstone Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cenovus Energy 1 9 4 0 2.21
Earthstone Energy 0 0 9 0 3.00

Cenovus Energy presently has a consensus target price of $14.70, suggesting a potential upside of 65.91%. Earthstone Energy has a consensus target price of $13.75, suggesting a potential upside of 55.90%. Given Cenovus Energy’s higher possible upside, equities analysts clearly believe Cenovus Energy is more favorable than Earthstone Energy.

Valuation & Earnings

This table compares Cenovus Energy and Earthstone Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cenovus Energy $13.14 billion 0.83 $2.60 billion ($0.02) -443.00
Earthstone Energy $108.08 million 5.22 -$12.51 million $1.43 6.17

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

Profitability

This table compares Cenovus Energy and Earthstone Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cenovus Energy -2.56% -6.66% -3.17%
Earthstone Energy 6.79% 2.47% 2.12%

Risk & Volatility

Cenovus Energy has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Earthstone Energy has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Insider & Institutional Ownership

74.6% of Cenovus Energy shares are owned by institutional investors. Comparatively, 75.7% of Earthstone Energy shares are owned by institutional investors. 64.4% of Earthstone Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Cenovus Energy pays an annual dividend of $0.15 per share and has a dividend yield of 1.7%. Earthstone Energy does not pay a dividend. Cenovus Energy pays out -750.0% of its earnings in the form of a dividend.

Summary

Earthstone Energy beats Cenovus Energy on 10 of the 15 factors compared between the two stocks.

Cenovus Energy Company Profile

Cenovus Energy Inc., together with its subsidiaries, develops, produces, and markets crude oil, natural gas liquids, and natural gas in Canada and the United States. The company's Oil Sands segment develops and produces bitumen and natural gas in northeast Alberta. This segment's bitumen assets include Foster Creek, Christina Lake, and Narrows Lake, as well as projects in the early stages of development, such as Telephone Lake. This segment also holds the Athabasca natural gas assets. Its Deep Basin segment holds assets primarily located in Elmworth-Wapiti, Kaybob-Edson, and Clearwater operating areas of British Columbia and Alberta, and include interests in natural gas processing facilities. The company's Refining and Marketing segment transports, sells, and refines crude oil into petroleum and chemical products. This segment owns a 50% interest ownership in two refineries in the United States; owns and operates a crude-by-rail terminal in Alberta; and markets third-party purchases and sales of product. Cenovus Energy Inc. is headquartered in Calgary, Canada.

Earthstone Energy Company Profile

Earthstone Energy, Inc., an oil and natural gas development and production company, operates in the up-stream segment of the oil and natural gas industry in the United States. Its asset portfolio includes the Midland Basin of west Texas and the Eagle Ford trend of south Texas. As of December 31, 2017, the company operated 91 gross Eagle Ford wells; and 12 gross Austin Chalk wells, as well as had 79,976 thousand barrels of oil equivalent (MBOE) of total proved reserves, 19,961 MBOE of proved developed reserves, and 60,015 MBOE of proved undeveloped reserves. Earthstone Energy, Inc. was founded in 1969 and is headquartered in The Woodlands, Texas.

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