Suncor Energy (NYSE:SU – Get Free Report) and APA (NASDAQ:APA – Get Free Report) are both large-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Valuation & Earnings
This table compares Suncor Energy and APA”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Suncor Energy | $35.29 billion | 2.28 | $4.24 billion | $6.80 | 10.20 |
| APA | $9.22 billion | 1.74 | $1.43 billion | $6.16 | 7.74 |
Suncor Energy has higher revenue and earnings than APA. APA is trading at a lower price-to-earnings ratio than Suncor Energy, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Suncor Energy has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, APA has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings for Suncor Energy and APA, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Suncor Energy | 0 | 1 | 5 | 3 | 3.22 |
| APA | 4 | 15 | 11 | 1 | 2.29 |
Suncor Energy presently has a consensus target price of $81.71, suggesting a potential upside of 17.85%. APA has a consensus target price of $45.17, suggesting a potential downside of 5.22%. Given Suncor Energy’s stronger consensus rating and higher possible upside, research analysts plainly believe Suncor Energy is more favorable than APA.
Insider & Institutional Ownership
67.4% of Suncor Energy shares are held by institutional investors. Comparatively, 83.0% of APA shares are held by institutional investors. 1.0% of Suncor Energy shares are held by insiders. Comparatively, 0.7% of APA shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Suncor Energy and APA’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Suncor Energy | 17.49% | 25.55% | 12.86% |
| APA | 23.08% | 28.34% | 12.04% |
Dividends
Suncor Energy pays an annual dividend of $1.73 per share and has a dividend yield of 2.5%. APA pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Suncor Energy pays out 25.4% of its earnings in the form of a dividend. APA pays out 16.2% 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. Suncor Energy has increased its dividend for 4 consecutive years. Suncor Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Suncor Energy beats APA on 12 of the 18 factors compared between the two stocks.
About Suncor Energy
Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Its operations span the energy value chain, from producing and processing crude oil to refining, marketing and distributing fuel products. The company’s upstream business includes oil sands development and upgrading in Alberta, as well as conventional and offshore oil and gas production. Its refining and marketing operations serve customers in Canada and the United States, selling products such as gasoline, diesel and jet fuel under brands including Petro-Canada.
About APA
APA Corporation is an independent energy company that explores for, develops and produces crude oil, natural gas and natural gas liquids. Its activities include operating wells and related infrastructure, as well as evaluating and developing oil and natural gas resources. The company’s principal operating areas include the United States and Egypt. APA also has offshore exploration interests in Suriname, where it has worked with partners to assess resources in the region. APA traces its history to Apache Corporation, founded in 1954.
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