Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR) and Cenovus Energy (NYSE:CVE) are both large-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.
Profitability
This table compares Petróleo Brasileiro S.A. - Petrobras and Cenovus Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Petróleo Brasileiro S.A. - Petrobras | -7.72% | -1.32% | -0.36% |
Cenovus Energy | -14.15% | -12.48% | -6.55% |
Risk & Volatility
Petróleo Brasileiro S.A. - Petrobras has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, Cenovus Energy has a beta of 3.12, suggesting that its stock price is 212% more volatile than the S&P 500.
Dividends
Petróleo Brasileiro S.A. - Petrobras pays an annual dividend of $0.09 per share and has a dividend yield of 1.2%. Cenovus Energy pays an annual dividend of $0.05 per share and has a dividend yield of 0.7%. Petróleo Brasileiro S.A. - Petrobras pays out 7.6% of its earnings in the form of a dividend. Cenovus Energy pays out 17.9% 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. Petróleo Brasileiro S.A. - Petrobras is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Petróleo Brasileiro S.A. - Petrobras and Cenovus Energy's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Petróleo Brasileiro S.A. - Petrobras | $76.59 billion | 0.67 | $10.15 billion | $1.18 | 6.62 |
Cenovus Energy | $15.21 billion | 0.99 | $1.65 billion | $0.28 | 26.54 |
Petróleo Brasileiro S.A. - Petrobras has higher revenue and earnings than Cenovus Energy. Petróleo Brasileiro S.A. - Petrobras is trading at a lower price-to-earnings ratio than Cenovus Energy, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
9.3% of Petróleo Brasileiro S.A. - Petrobras shares are owned by institutional investors. Comparatively, 72.7% of Cenovus Energy shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Petróleo Brasileiro S.A. - Petrobras and Cenovus Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Petróleo Brasileiro S.A. - Petrobras | 5 | 3 | 0 | 0 | 1.38 |
Cenovus Energy | 1 | 7 | 7 | 0 | 2.40 |
Petróleo Brasileiro S.A. - Petrobras presently has a consensus target price of $10.75, indicating a potential upside of 37.64%. Cenovus Energy has a consensus target price of $8.0192, indicating a potential upside of 7.93%. Given Petróleo Brasileiro S.A. - Petrobras' higher possible upside, analysts plainly believe Petróleo Brasileiro S.A. - Petrobras is more favorable than Cenovus Energy.
Summary
Petróleo Brasileiro S.A. - Petrobras beats Cenovus Energy on 10 of the 15 factors compared between the two stocks.