Financial Review: Cenovus Energy (NYSE:CVE) & W&T Offshore (NYSE:WTI)

W&T Offshore (NYSE:WTI) and Cenovus Energy (NYSE:CVE) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

42.9% of W&T Offshore shares are owned by institutional investors. Comparatively, 51.2% of Cenovus Energy shares are owned by institutional investors. 35.9% of W&T Offshore shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Cenovus Energy pays an annual dividend of $0.63 per share and has a dividend yield of 2.3%. W&T Offshore pays out -11.8% of its earnings in the form of a dividend. Cenovus Energy pays out 18.6% 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. Cenovus Energy has increased its dividend for 4 consecutive years. Cenovus Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

W&T Offshore has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Cenovus Energy has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for W&T Offshore and Cenovus Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W&T Offshore	1	0	1	1	2.67
Cenovus Energy	0	1	13	2	3.06

W&T Offshore currently has a consensus target price of $4.25, suggesting a potential upside of 38.66%. Cenovus Energy has a consensus target price of $39.00, suggesting a potential upside of 41.43%. Given Cenovus Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Cenovus Energy is more favorable than W&T Offshore.

Profitability

This table compares W&T Offshore and Cenovus Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
W&T Offshore	-8.44%	N/A	-1.72%
Cenovus Energy	15.40%	26.15%	13.36%

Valuation & Earnings

This table compares W&T Offshore and Cenovus Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W&T Offshore	$601.43 million	0.79	-$150.06 million	($0.34)	-9.01
Cenovus Energy	$58.03 billion	0.86	$2.81 billion	$3.39	8.13

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

Summary

Cenovus Energy beats W&T Offshore on 16 of the 18 factors compared between the two stocks.

About W&T Offshore

W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.

About Cenovus Energy

Cenovus Energy Inc., together with its subsidiaries, develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products in Canada and internationally. The company operates through Oil Sands, Conventional, Offshore, Canadian Refining, and U.S. Refining segments. The Oil Sands segment develops and produces bitumen and heavy oil in northern Alberta and Saskatchewan. This segment assets include Foster Creek, Christina Lake, and Sunrise projects, as well as Lloydminster thermal and conventional heavy oil assets. The Conventional segment holds natural gas liquids and natural gas assets primarily located in Elmworth-Wapiti, Kaybob-Edson, Clearwater, and Rainbow Lake operating in Alberta and British Columbia, as well as interests in various natural gas processing facilities. The offshore segment engages in offshore operation, exploration, and development activities in China and the East Coast of Canada. The Canadian Refining segment owns and operates Lloydminster upgrading and asphalt refining complex, which converts heavy oil and bitumen into synthetic crude oil, diesel, asphalt, and other ancillary products, as well as Bruderheim crude-by-rail terminal and ethanol plants. The U.S. Refining segment refines crude oil to produce gasoline, diesel, jet fuel, asphalt, and other products. Cenovus Energy Inc. is headquartered in Calgary, Canada.