Analyzing Tourmaline Oil (OTCMKTS:TRMLF) & Torm (NASDAQ:TRMD)

Torm (NASDAQ:TRMD) and Tourmaline Oil (OTCMKTS:TRMLF) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

Torm pays an annual dividend of $7.01 per share and has a dividend yield of 19.8%. Tourmaline Oil pays an annual dividend of $1.50 per share and has a dividend yield of 3.3%. Torm pays out 97.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tourmaline Oil pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Torm is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Torm and Tourmaline Oil”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torm	$1.34 billion	2.69	$285.30 million	$7.21	4.90
Tourmaline Oil	$4.72 billion	3.73	$187.99 million	$1.53	29.70

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

Profitability

This table compares Torm and Tourmaline Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torm	38.94%	31.88%	20.89%
Tourmaline Oil	12.12%	11.95%	8.26%

Analyst Ratings

This is a breakdown of recent ratings for Torm and Tourmaline Oil, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torm	0	1	2	1	3.00
Tourmaline Oil	1	5	3	0	2.22

Torm currently has a consensus price target of $38.00, suggesting a potential upside of 7.47%. Tourmaline Oil has a consensus price target of $65.00, suggesting a potential upside of 43.05%. Given Tourmaline Oil’s higher possible upside, analysts clearly believe Tourmaline Oil is more favorable than Torm.

Volatility and Risk

Torm has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500. Comparatively, Tourmaline Oil has a beta of -0.29, indicating that its share price is 129% less volatile than the S&P 500.

Institutional & Insider Ownership

73.9% of Torm shares are owned by institutional investors. Comparatively, 1.8% of Tourmaline Oil shares are owned by institutional investors. 0.4% of Torm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Torm beats Tourmaline Oil on 12 of the 17 factors compared between the two stocks.

About Torm

TORM plc is an international shipping company specializing in the seaborne transportation of refined oil products. Its product tankers carry cargoes such as gasoline, diesel, jet fuel and naphtha for customers in the energy and commodities industries. Founded in Copenhagen in 1889, TORM operates a fleet of product tankers serving global shipping routes. The company’s activities span the transportation of petroleum products between major production, trading and consumption markets. TORM is headquartered in Copenhagen and is led by Chief Executive Officer Jacob Meldgaard.

About Tourmaline Oil

Tourmaline Oil Corp. is a Canadian energy company focused on the exploration, development and production of natural gas, natural gas liquids and crude oil. The company’s operations are concentrated in Western Canada, including resource areas in Alberta and British Columbia. Founded in 2008, Tourmaline has grown through development of its natural gas and liquids-rich assets and through acquisitions. Its activities span the energy-production process, from identifying and developing reserves to producing and marketing hydrocarbons.