Contrasting Canadian Natural Resources (NYSE:CNQ) and Enerflex (NYSE:EFXT)

Canadian Natural Resources (NYSE:CNQ) and Enerflex (NYSE:EFXT) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	19.00%	19.67%	9.59%
Enerflex	5.54%	10.21%	3.87%

Risk and Volatility

Canadian Natural Resources has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Enerflex has a beta of 2, indicating that its stock price is 100% more volatile than the S&P 500.

Institutional and Insider Ownership

74.0% of Canadian Natural Resources shares are owned by institutional investors. Comparatively, 46.5% of Enerflex shares are owned by institutional investors. 5.0% of Canadian Natural Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Canadian Natural Resources and Enerflex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$30.30 billion	2.16	$4.46 billion	$2.82	11.09
Enerflex	$2.41 billion	0.49	$32.00 million	$1.04	9.39

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

Analyst Ratings

This is a breakdown of recent ratings for Canadian Natural Resources and Enerflex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	2	4	1	2.86
Enerflex	0	1	3	0	2.75

Canadian Natural Resources presently has a consensus target price of $62.00, suggesting a potential upside of 98.21%. Enerflex has a consensus target price of $11.13, suggesting a potential upside of 13.93%. Given Canadian Natural Resources’ stronger consensus rating and higher possible upside, research analysts plainly believe Canadian Natural Resources is more favorable than Enerflex.

Dividends

Canadian Natural Resources pays an annual dividend of $1.71 per share and has a dividend yield of 5.5%. Enerflex pays an annual dividend of $0.11 per share and has a dividend yield of 1.1%. Canadian Natural Resources pays out 60.6% of its earnings in the form of a dividend. Enerflex pays out 10.6% 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 increased its dividend for 24 consecutive years and Enerflex has increased its dividend for 1 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Canadian Natural Resources beats Enerflex on 16 of the 18 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 Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.