Head-To-Head Analysis: EOG Resources (NYSE:EOG) and Cheniere Energy (NYSE:LNG)

EOG Resources (NYSE:EOG) and Cheniere Energy (NYSE:LNG) are both large-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Analyst Recommendations

This is a summary of current ratings and recommmendations for EOG Resources and Cheniere Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EOG Resources	0	16	13	1	2.50
Cheniere Energy	0	2	16	2	3.00

EOG Resources presently has a consensus target price of $156.39, suggesting a potential upside of 17.10%. Cheniere Energy has a consensus target price of $293.50, suggesting a potential upside of 30.78%. Given Cheniere Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Cheniere Energy is more favorable than EOG Resources.

Profitability

This table compares EOG Resources and Cheniere Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EOG Resources	23.01%	19.25%	11.37%
Cheniere Energy	7.23%	38.95%	9.34%

Dividends

EOG Resources pays an annual dividend of $4.08 per share and has a dividend yield of 3.1%. Cheniere Energy pays an annual dividend of $2.22 per share and has a dividend yield of 1.0%. EOG Resources pays out 40.2% of its earnings in the form of a dividend. Cheniere Energy pays out 36.5% 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. EOG Resources has increased its dividend for 8 consecutive years. EOG Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

EOG Resources has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500.

Insider & Institutional Ownership

89.9% of EOG Resources shares are owned by institutional investors. Comparatively, 87.3% of Cheniere Energy shares are owned by institutional investors. 0.1% of EOG Resources shares are owned by insiders. Comparatively, 0.6% of Cheniere Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares EOG Resources and Cheniere Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EOG Resources	$22.63 billion	3.14	$4.98 billion	$10.16	13.14
Cheniere Energy	$19.98 billion	2.35	$5.33 billion	$6.08	36.91

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

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About Cheniere Energy

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.