Financial Review: ENI (E) & CNOOC (CEO)

ENI (NYSE:E) and CNOOC (NYSE:CEO) are both large-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Earnings & Valuation

This table compares ENI and CNOOC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ENI $80.18 billion N/A $3.81 billion $1.51 21.66
CNOOC $27.58 billion 2.61 $3.79 billion $9.30 17.35

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

Dividends

ENI pays an annual dividend of $1.40 per share and has a dividend yield of 4.3%. CNOOC pays an annual dividend of $6.85 per share and has a dividend yield of 4.2%. ENI pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CNOOC pays out 73.7% of its earnings in the form of a dividend. ENI has raised its dividend for 2 consecutive years and CNOOC has raised its dividend for 2 consecutive years.

Profitability

This table compares ENI and CNOOC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ENI 7.47% 8.38% 3.52%
CNOOC N/A N/A N/A

Volatility & Risk

ENI has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, CNOOC has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for ENI and CNOOC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ENI 2 2 7 0 2.45
CNOOC 0 0 4 0 3.00

ENI presently has a consensus target price of $25.62, suggesting a potential downside of 21.65%. Given ENI’s higher probable upside, equities research analysts clearly believe ENI is more favorable than CNOOC.

Insider & Institutional Ownership

1.9% of CNOOC shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

ENI beats CNOOC on 9 of the 14 factors compared between the two stocks.

About ENI

Eni S.p.A. engages in the oil and gas, electricity generation and sale, and petrochemicals businesses. The company is involved in the oil and natural gas exploration, and field development and production activities, as well as liquefied natural gas (LNG) operations in 46 countries, including Italy, Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Algeria, Australia, Venezuela, Iraq, Indonesia, Ghana, and Mozambique. It also supplies, trades in, and markets gas and electricity; transports international gas; supplies crude oil; and refines and markets petroleum products at retail and wholesale markets primarily in Italy and rest of Europe. In addition, the company engages in the commodity risk management and asset-backed trading activities; and production of various chemicals, including olefins and aromatics, basic intermediate products, polystyrenes, elastomers, and polyethylene in Italy and Western Europe. Further, it is involved in commodity trading and derivatives. Eni S.p.A. was founded in 1953 and is headquartered in Rome, Italy.

About CNOOC

CNOOC Limited, an investment holding company, explores for, develops, produces, and sells crude oil, natural gas, and other petroleum products. It operates through Exploration and Production, and Trading Business segments. The company produces offshore crude oil and natural gas primarily in Bohai, Western South China Sea, Eastern South China Sea, and East China Sea in offshore China. It also holds interests in various oil and gas assets in Asia, Africa, North America, South America, Oceania, and Europe. As of December 31, 2017, the company had net proved reserves of approximately 4.84 billion barrels-of-oil equivalent. In addition, it is involved in the issuance of bonds. The company was incorporated in 1999 and is based in Central, Hong Kong. CNOOC Limited is a subsidiary of China National Offshore Oil Corporation.

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