Comparing Paramount Resources (OTCMKTS:PRMRF) & Enerflex (NYSE:EFXT)

Paramount Resources (OTCMKTS:PRMRF) and Enerflex (NYSE:EFXT) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares Paramount Resources and Enerflex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paramount Resources	111.48%	6.89%	5.31%
Enerflex	5.54%	10.21%	3.87%

Dividends

Paramount Resources pays an annual dividend of $0.43 per share and has a dividend yield of 2.9%. Enerflex pays an annual dividend of $0.11 per share and has a dividend yield of 1.1%. Paramount Resources pays out 6.1% of its earnings in the form of a dividend. Enerflex pays out 10.6% 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. Enerflex has increased its dividend for 1 consecutive years. Paramount Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

4.1% of Paramount Resources shares are owned by institutional investors. Comparatively, 46.5% of Enerflex shares are owned by institutional investors. 36.3% of Paramount Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Paramount Resources and Enerflex”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paramount Resources	$1.28 billion	1.65	$245.14 million	$7.01	2.10
Enerflex	$2.41 billion	0.51	$32.00 million	$1.04	9.75

Paramount Resources has higher earnings, but lower revenue than Enerflex. Paramount Resources is trading at a lower price-to-earnings ratio than Enerflex, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Paramount Resources has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Enerflex has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Paramount Resources and Enerflex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paramount Resources	0	2	0	1	2.67
Enerflex	0	1	3	0	2.75

Enerflex has a consensus target price of $11.13, suggesting a potential upside of 9.66%. Given Enerflex’s stronger consensus rating and higher probable upside, analysts plainly believe Enerflex is more favorable than Paramount Resources.

About Paramount Resources

Paramount Resources Ltd. explores for and develops conventional and unconventional petroleum and natural gas reserves and resources in Canada. The company holds interests in the Karr and Wapiti Montney properties covering an area of 109,000 net acres located south of the city of Grande Prairie, Alberta; Kaybob North Duvernay development and natural gas producing properties covering an area of 124,000 net acres located in west-central Alberta; and Willesden Green Duvernay development in central Alberta and shale gas producing properties in the Horn River Basin in northeast British Columbia covering an area of 249,000 net acres. The company was founded in 1976 and is based in Calgary, Canada.

About Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.