Reviewing EOG Resources (NYSE:EOG) & Northern Oil and Gas (NYSE:NOG)

EOG Resources (NYSE:EOG) and Northern Oil and Gas (NYSE:NOG) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Dividends

EOG Resources pays an annual dividend of $3.90 per share and has a dividend yield of 3.2%. Northern Oil and Gas pays an annual dividend of $1.80 per share and has a dividend yield of 7.0%. EOG Resources pays out 37.9% of its earnings in the form of a dividend. Northern Oil and Gas pays out 29.7% 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. EOG Resources has raised its dividend for 8 consecutive years and Northern Oil and Gas has raised its dividend for 4 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

EOG Resources has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares EOG Resources and Northern Oil and Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EOG Resources	25.25%	20.51%	12.93%
Northern Oil and Gas	23.62%	22.12%	9.49%

Analyst Ratings

This is a breakdown of recent ratings and price targets for EOG Resources and Northern Oil and Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EOG Resources	0	12	11	1	2.54
Northern Oil and Gas	1	4	5	1	2.55

EOG Resources currently has a consensus target price of $143.6087, indicating a potential upside of 18.25%. Northern Oil and Gas has a consensus target price of $36.8889, indicating a potential upside of 44.32%. Given Northern Oil and Gas’ stronger consensus rating and higher possible upside, analysts clearly believe Northern Oil and Gas is more favorable than EOG Resources.

Valuation and Earnings

This table compares EOG Resources and Northern Oil and Gas”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EOG Resources	$23.70 billion	2.80	$6.40 billion	$10.29	11.80
Northern Oil and Gas	$2.23 billion	1.12	$520.31 million	$6.06	4.22

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

Institutional & Insider Ownership

89.9% of EOG Resources shares are held by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are held by institutional investors. 0.1% of EOG Resources shares are held by insiders. Comparatively, 2.9% of Northern Oil and Gas shares are held 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.

Summary

EOG Resources beats Northern Oil and Gas on 9 of the 17 factors compared between the two stocks.

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.