Critical Analysis: CVR Energy (NYSE:CVI) & Alvopetro Energy (OTCMKTS:ALVOF)

CVR Energy (NYSE:CVI) and Alvopetro Energy (OTCMKTS:ALVOF) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares CVR Energy and Alvopetro Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVR Energy	0.81%	-15.21%	-3.33%
Alvopetro Energy	42.13%	27.90%	19.95%

Insider and Institutional Ownership

98.9% of CVR Energy shares are held by institutional investors. 70.8% of CVR Energy shares are held 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.

Volatility & Risk

CVR Energy has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Alvopetro Energy has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for CVR Energy and Alvopetro Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVR Energy	4	4	0	0	1.50
Alvopetro Energy	0	1	0	0	2.00

CVR Energy presently has a consensus price target of $40.75, indicating a potential downside of 28.93%. Given CVR Energy’s higher probable upside, analysts clearly believe CVR Energy is more favorable than Alvopetro Energy.

Earnings and Valuation

This table compares CVR Energy and Alvopetro Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVR Energy	$7.16 billion	0.80	$27.00 million	$0.68	84.32
Alvopetro Energy	$57.95 million	4.20	$23.10 million	$0.74	8.81

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

Dividends

CVR Energy pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Alvopetro Energy pays an annual dividend of $0.48 per share and has a dividend yield of 7.4%. CVR Energy pays out 58.8% of its earnings in the form of a dividend. Alvopetro Energy pays out 64.9% 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. CVR Energy has increased its dividend for 1 consecutive years.

Summary

CVR Energy beats Alvopetro Energy on 9 of the 16 factors compared between the two stocks.

About CVR Energy

CVR Energy, Inc., together with its subsidiaries, engages in the petroleum refining and marketing, and nitrogen fertilizer manufacturing activities in the United States. It operates in two segments, Petroleum and Nitrogen Fertilizer. The Petroleum segment refines and supplies gasoline, crude oil, distillate, diesel fuel, and other refined products. This segment also owns and operates a coking medium-sour crude oil refinery in southeast Kansas; and a crude oil refinery in Wynnewood, Oklahoma, as well as supporting logistics assets. This segment primarily serves retailers, railroads, farm cooperatives, and other refiners/marketers. The Nitrogen Fertilizer segment owns and operates a nitrogen fertilizer plant in North America that utilizes a pet coke gasification process to produce nitrogen fertilizer products; and a nitrogen fertilizer facility in East Dubuque, Illinois that produces nitrogen fertilizers in the form of ammonia and urea ammonium nitrate (UAN), nitric acid, and liquid and granulated urea. This segment primarily markets UAN products to agricultural customers; and ammonia products to agricultural and industrial customers. The company was founded in 1906 and is based in Sugar Land, Texas. CVR Energy, Inc. is a subsidiary of Icahn Enterprises L.P.

About Alvopetro Energy

Alvopetro Energy Ltd. operates as an independent upstream and midstream operator. It engages in the acquisition, exploration, development, and production of hydrocarbons. The company holds interests in the Caburé and Murucututu natural gas assets, Block 182 and 183 exploration assets, and Bom Lugar and Mãe-da-lua oil fields, which covers an area of approximately 22,166 acres in the Recôncavo basin onshore Brazil. Alvopetro Energy Ltd. was incorporated in 2013 and is headquartered in Calgary, Canada.