Contrasting Evolution Petroleum (NYSE:EPM) and Ecopetrol (NYSE:EC)

Evolution Petroleum (NYSE:EPM) and Ecopetrol (NYSE:EC) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Dividends

Evolution Petroleum pays an annual dividend of $0.48 per share and has a dividend yield of 11.2%. Ecopetrol pays an annual dividend of $1.67 per share and has a dividend yield of 18.5%. Evolution Petroleum pays out 960.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ecopetrol pays out 79.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ecopetrol is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

60.1% of Evolution Petroleum shares are owned by institutional investors. 10.1% of Evolution Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Evolution Petroleum and Ecopetrol’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evolution Petroleum	2.04%	2.42%	1.20%
Ecopetrol	12.92%	8.66%	3.04%

Earnings and Valuation

This table compares Evolution Petroleum and Ecopetrol”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evolution Petroleum	$86.42 million	1.70	$4.08 million	$0.05	86.00
Ecopetrol	$133,328.00 billion	0.00	$25.27 billion	$2.09	4.32

Ecopetrol has higher revenue and earnings than Evolution Petroleum. Ecopetrol is trading at a lower price-to-earnings ratio than Evolution Petroleum, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Evolution Petroleum and Ecopetrol, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evolution Petroleum	0	0	1	1	3.50
Ecopetrol	1	2	1	0	2.00

Evolution Petroleum currently has a consensus price target of $6.50, suggesting a potential upside of 51.16%. Ecopetrol has a consensus price target of $11.00, suggesting a potential upside of 21.88%. Given Evolution Petroleum’s stronger consensus rating and higher possible upside, analysts plainly believe Evolution Petroleum is more favorable than Ecopetrol.

Volatility and Risk

Evolution Petroleum has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Summary

Ecopetrol beats Evolution Petroleum on 9 of the 16 factors compared between the two stocks.

About Evolution Petroleum

Evolution Petroleum Corporation, an energy company, engages in the development, production, ownership, and exploitation of onshore oil and gas properties in the United States. The company holds a non-operated interests in the SCOOP and STACK plays located in Central Oklahoma; the Chaveroo Field situated in Chaves and Roosevelt Counties, New Mexico; the Jonah Field located in Sublette County, Wyoming; the Williston Basin situated in Williston, North Dakota; the Barnett Shale field located in North Texas; the Hamilton Dome situated in Hot Springs County, Wyoming; and the Delhi Field, an onshore CO2-EOR project located in northeast Louisiana in Franklin, Madison, and Richland Parishes, as well as small overriding royalty interests in four onshore central Texas wells. The company was founded in 2003 and is based in Houston, Texas.

About Ecopetrol

Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services. As of December 31, 2022, the company had approximately 9,127 kilometers of crude oil and multi-purpose pipelines. It also produces and commercializes polypropylene resins and compounds, and masterbatches; and offers industrial service sales to customers and specialized management services. It has operations in Colombia, the United States, Asia, Central America and the Caribbean, Europe, and South America. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was incorporated in 1948 and is headquartered in Bogotá, Colombia.