Contrasting Devon Energy (NYSE:DVN) and Ultrapar Participacoes (NYSE:UGP)

Devon Energy (NYSE:DVN) and Ultrapar Participacoes (NYSE:UGP) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

69.7% of Devon Energy shares are held by institutional investors. Comparatively, 3.6% of Ultrapar Participacoes shares are held by institutional investors. 4.6% of Devon Energy shares are held by insiders. Comparatively, 1.8% of Ultrapar Participacoes shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Devon Energy and Ultrapar Participacoes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Devon Energy	16.67%	14.93%	7.91%
Ultrapar Participacoes	2.28%	18.84%	7.17%

Dividends

Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Ultrapar Participacoes pays an annual dividend of $0.31 per share and has a dividend yield of 5.8%. Devon Energy pays out 32.0% of its earnings in the form of a dividend. Ultrapar Participacoes pays out 50.8% 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. Devon Energy has increased its dividend for 1 consecutive years.

Volatility and Risk

Devon Energy has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Ultrapar Participacoes has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Devon Energy and Ultrapar Participacoes, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Devon Energy	0	3	25	2	2.97
Ultrapar Participacoes	0	5	3	1	2.56

Devon Energy presently has a consensus price target of $60.61, suggesting a potential upside of 39.76%. Ultrapar Participacoes has a consensus price target of $6.54, suggesting a potential upside of 22.36%. Given Devon Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe Devon Energy is more favorable than Ultrapar Participacoes.

Earnings & Valuation

This table compares Devon Energy and Ultrapar Participacoes”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Devon Energy	$17.19 billion	2.78	$2.64 billion	$4.00	10.84
Ultrapar Participacoes	$25.51 billion	0.23	$439.48 million	$0.61	8.76

Devon Energy has higher earnings, but lower revenue than Ultrapar Participacoes. Ultrapar Participacoes is trading at a lower price-to-earnings ratio than Devon Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Devon Energy beats Ultrapar Participacoes on 14 of the 18 factors compared between the two stocks.

About Devon Energy

Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.