Head to Head Review: Enerplus (NYSE:ERF) versus Murphy Oil (NYSE:MUR)

Murphy Oil (NYSE:MUR) and Enerplus (NYSE:ERF) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, valuation, earnings and dividends.

Institutional and Insider Ownership

74.8% of Murphy Oil shares are held by institutional investors. Comparatively, 52.7% of Enerplus shares are held by institutional investors. 6.5% of Murphy Oil shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Murphy Oil and Enerplus, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Murphy Oil 1 4 6 0 2.45
Enerplus 0 2 7 0 2.78

Murphy Oil presently has a consensus target price of $22.00, indicating a potential upside of 4.02%. Enerplus has a consensus target price of $10.09, indicating a potential upside of 65.47%. Given Enerplus’ stronger consensus rating and higher possible upside, analysts plainly believe Enerplus is more favorable than Murphy Oil.

Volatility & Risk

Murphy Oil has a beta of 3.2, indicating that its share price is 220% more volatile than the S&P 500. Comparatively, Enerplus has a beta of 3.21, indicating that its share price is 221% more volatile than the S&P 500.

Earnings & Valuation

This table compares Murphy Oil and Enerplus’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Murphy Oil $1.97 billion 1.66 -$1.15 billion ($1.25) -16.92
Enerplus $550.34 million 2.85 -$689.29 million $0.07 87.14

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

Profitability

This table compares Murphy Oil and Enerplus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Murphy Oil -75.92% -3.09% -1.30%
Enerplus -109.61% 8.41% 3.25%

Dividends

Murphy Oil pays an annual dividend of $0.50 per share and has a dividend yield of 2.4%. Enerplus pays an annual dividend of $0.05 per share and has a dividend yield of 0.8%. Murphy Oil pays out -40.0% of its earnings in the form of a dividend. Enerplus pays out 71.4% 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. Murphy Oil has increased its dividend for 1 consecutive years and Enerplus has increased its dividend for 1 consecutive years. Murphy Oil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Enerplus beats Murphy Oil on 10 of the 16 factors compared between the two stocks.

Murphy Oil Company Profile

Murphy Oil Corporation operates as an oil and natural gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. Murphy Oil Corporation was incorporated in 1950 and is headquartered in Houston, Texas.

Enerplus Company Profile

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The company's oil and natural gas properties are located primarily in North Dakota, Montana, Colorado, and Pennsylvania; and Alberta, British Columbia, and Saskatchewan. As of December 31, 2019, it had proved plus probable gross reserves of approximately 9.0 million barrels (MMbbls) of light and medium crude oil; 22.3 MMbbls of heavy crude oil; 170.1 MMbbls of tight oil; 23.5 MMbbls of natural gas liquids; 23.2 billion cubic feet (Bcf) of conventional natural gas; and 1,173.9 Bcf of shale gas. Enerplus Corporation was founded in 1986 and is headquartered in Calgary, Canada.

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