APA (NASDAQ:APA – Get Free Report) and Murphy Oil (NYSE:MUR – Get Free Report) are both mid-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
Analyst Recommendations
This is a summary of current recommendations and price targets for APA and Murphy Oil, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| APA | 4 | 10 | 5 | 0 | 2.05 |
| Murphy Oil | 1 | 9 | 3 | 0 | 2.15 |
APA currently has a consensus price target of $28.25, indicating a potential upside of 35.04%. Murphy Oil has a consensus price target of $34.92, indicating a potential upside of 22.74%. Given APA’s higher probable upside, research analysts clearly believe APA is more favorable than Murphy Oil.
Volatility & Risk
Profitability
This table compares APA and Murphy Oil’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| APA | 24.36% | 27.86% | 7.99% |
| Murphy Oil | 13.44% | 7.66% | 4.28% |
Valuation and Earnings
This table compares APA and Murphy Oil”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| APA | $9.74 billion | 0.78 | $2.86 billion | $2.26 | 9.26 |
| Murphy Oil | $3.02 billion | 1.37 | $407.17 million | $2.69 | 10.58 |
APA has higher revenue and earnings than Murphy Oil. APA is trading at a lower price-to-earnings ratio than Murphy Oil, indicating that it is currently the more affordable of the two stocks.
Dividends
APA pays an annual dividend of $1.00 per share and has a dividend yield of 4.8%. Murphy Oil pays an annual dividend of $1.30 per share and has a dividend yield of 4.6%. APA pays out 44.2% of its earnings in the form of a dividend. Murphy Oil pays out 48.3% 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. APA is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
83.0% of APA shares are owned by institutional investors. Comparatively, 78.3% of Murphy Oil shares are owned by institutional investors. 1.3% of APA shares are owned by company insiders. Comparatively, 5.9% of Murphy Oil shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
APA beats Murphy Oil on 11 of the 16 factors compared between the two stocks.
About APA
APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.
About Murphy Oil
Murphy Oil Corporation, together with its subsidiaries, operates as an oil and 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. The company was incorporated in 1950 and is headquartered in Houston, Texas.
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