Vaalco Energy (NYSE:EGY) versus Teekay Tankers (NYSE:TNK) Head-To-Head Review

Vaalco Energy (NYSE:EGY) and Teekay Tankers (NYSE:TNK) are both energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Analyst Recommendations

This is a summary of recent recommendations for Vaalco Energy and Teekay Tankers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vaalco Energy	1	1	0	0	1.50
Teekay Tankers	1	3	2	0	2.17

Vaalco Energy currently has a consensus price target of $7.30, suggesting a potential upside of 33.09%. Teekay Tankers has a consensus price target of $99.50, suggesting a potential upside of 11.16%. Given Vaalco Energy’s higher probable upside, analysts clearly believe Vaalco Energy is more favorable than Teekay Tankers.

Profitability

This table compares Vaalco Energy and Teekay Tankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vaalco Energy	-34.37%	-15.97%	-6.25%
Teekay Tankers	53.76%	26.99%	24.69%

Insider & Institutional Ownership

50.3% of Vaalco Energy shares are owned by institutional investors. Comparatively, 52.7% of Teekay Tankers shares are owned by institutional investors. 3.0% of Vaalco Energy shares are owned by insiders. Comparatively, 1.9% of Teekay Tankers shares are owned 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

Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.6%. Teekay Tankers pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. Vaalco Energy pays out -17.2% of its earnings in the form of a dividend. Teekay Tankers pays out 5.0% 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. Teekay Tankers has raised its dividend for 2 consecutive years. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Vaalco Energy has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, Teekay Tankers has a beta of -0.05, meaning that its stock price is 105% less volatile than the S&P 500.

Earnings and Valuation

This table compares Vaalco Energy and Teekay Tankers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vaalco Energy	$359.27 million	1.61	-$41.39 million	($1.45)	-3.78
Teekay Tankers	$1.29 billion	2.39	$351.19 million	$19.91	4.50

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

Summary

Teekay Tankers beats Vaalco Energy on 12 of the 17 factors compared between the two stocks.

About Vaalco Energy

VAALCO Energy, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas. Its activities include operating and investing in producing fields as well as evaluating opportunities to expand its resource base. The company’s operations and interests are focused on Africa, including offshore assets in Gabon and exploration and production activities in Egypt. VAALCO has also held interests in other African countries, including Côte d’Ivoire and Equatorial Guinea.

About Teekay Tankers

Teekay Tankers Ltd. is an international marine transportation company that owns and operates tankers carrying crude oil and refined petroleum products. Its fleet includes crude-oil vessels such as Aframax and Suezmax tankers, as well as product carriers. The company serves customers in the global energy industry, including oil companies and commodity traders. Its vessels transport petroleum by sea on routes around the world, with employment through a mix of spot voyages and longer-term charter arrangements.