Enerplus Corporation (NYSE: ERF) and Devon Energy Corporation (NYSE:DVN) are both mid-cap oil & gas exploration and production – nec companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.
Risk and Volatility
Enerplus Corporation has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, Devon Energy Corporation has a beta of 2.22, suggesting that its stock price is 122% more volatile than the S&P 500.
Enerplus Corporation pays an annual dividend of $0.10 per share and has a dividend yield of 1.0%. Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Enerplus Corporation pays out 3.1% of its earnings in the form of a dividend. Devon Energy Corporation pays out 8.2% 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. Enerplus Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Enerplus Corporation and Devon Energy Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Enerplus Corporation||$545.68 million||4.30||$300.12 million||$3.26||2.97|
|Devon Energy Corporation||$12.20 billion||1.71||-$3.30 billion||$2.93||13.53|
Enerplus Corporation has higher revenue, but lower earnings than Devon Energy Corporation. Enerplus Corporation is trading at a lower price-to-earnings ratio than Devon Energy Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Enerplus Corporation and Devon Energy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Devon Energy Corporation||11.62%||6.88%||2.88%|
Institutional & Insider Ownership
51.2% of Enerplus Corporation shares are owned by institutional investors. Comparatively, 77.3% of Devon Energy Corporation shares are owned by institutional investors. 0.5% of Devon Energy Corporation shares are owned by insiders. 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.
This is a breakdown of current recommendations and price targets for Enerplus Corporation and Devon Energy Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Devon Energy Corporation||0||4||14||0||2.78|
Enerplus Corporation presently has a consensus price target of $14.80, suggesting a potential upside of 52.73%. Devon Energy Corporation has a consensus price target of $45.88, suggesting a potential upside of 15.72%. Given Enerplus Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Enerplus Corporation is more favorable than Devon Energy Corporation.
Enerplus Corporation beats Devon Energy Corporation on 10 of the 16 factors compared between the two stocks.
Enerplus Corporation Company Profile
Enerplus Corporation is an oil and natural gas company. The Company’s oil and natural gas property interests are located in the United States, primarily in North Dakota, Montana, and Pennsylvania, as well as in western Canada in the provinces of Alberta, British Columbia and Saskatchewan. The Company’s oil and natural gas property interests contains proved plus probable gross reserves of approximately 14.3 million barrels (MMbbls) of light and medium crude oil, 39.0 MMbbls of heavy crude oil, 123 MMbbls of tight oil, 18.1 MMbbls of natural gas liquids (NGLs), 126.3 billion cubic feet (Bcf) of conventional natural gas and 1,002.8 Bcf of shale gas, for a total of approximately 382.5 million barrels of oil equivalent (MMBOE). The Company’s primary crude oil properties in the United States are located in the Fort Berthold region of North Dakota and in Richland County, Montana.
Devon Energy Corporation Company Profile
Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company’s segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in various North American onshore areas in the United States and Canada. The Company’s U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company’s properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.
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