Canadian Natural Resources (NYSE:CNQ) vs. ConocoPhillips (NYSE:COP) Head to Head Review

Canadian Natural Resources (NYSE:CNQ) and ConocoPhillips (NYSE:COP) are both large-cap energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Canadian Natural Resources has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500.

Profitability

This table compares Canadian Natural Resources and ConocoPhillips’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	22.78%	23.91%	11.45%
ConocoPhillips	14.22%	14.72%	7.77%

Institutional and Insider Ownership

74.0% of Canadian Natural Resources shares are held by institutional investors. Comparatively, 82.4% of ConocoPhillips shares are held by institutional investors. 5.0% of Canadian Natural Resources shares are held by insiders. Comparatively, 0.1% of ConocoPhillips shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.8%. ConocoPhillips pays an annual dividend of $3.36 per share and has a dividend yield of 2.6%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. ConocoPhillips pays out 44.4% 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. Canadian Natural Resources has raised its dividend for 24 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Canadian Natural Resources and ConocoPhillips”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$31.61 billion	3.11	$7.74 billion	$4.05	11.76
ConocoPhillips	$61.55 billion	2.50	$7.99 billion	$7.56	16.93

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Canadian Natural Resources and ConocoPhillips, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	5	7	0	2.58
ConocoPhillips	2	8	17	1	2.61

Canadian Natural Resources presently has a consensus target price of $57.00, suggesting a potential upside of 19.68%. ConocoPhillips has a consensus target price of $141.24, suggesting a potential upside of 10.35%. Given Canadian Natural Resources’ higher possible upside, research analysts clearly believe Canadian Natural Resources is more favorable than ConocoPhillips.

Summary

Canadian Natural Resources beats ConocoPhillips on 9 of the 17 factors compared between the two stocks.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

About ConocoPhillips

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.