Head-To-Head Survey: Vermilion Energy (VET) vs. Murphy Oil (MUR)

Murphy Oil (NYSE: MUR) and Vermilion Energy (NYSE:VET) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

Murphy Oil pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Vermilion Energy pays an annual dividend of $2.08 per share and has a dividend yield of 5.8%. Murphy Oil pays out -55.6% of its earnings in the form of a dividend. Vermilion Energy pays out 611.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Murphy Oil has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500. Comparatively, Vermilion Energy has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Murphy Oil and Vermilion Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Murphy Oil 1 8 2 0 2.09
Vermilion Energy 0 0 3 0 3.00

Murphy Oil presently has a consensus target price of $32.18, indicating a potential upside of 13.60%. Vermilion Energy has a consensus target price of $52.25, indicating a potential upside of 46.77%. Given Vermilion Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Vermilion Energy is more favorable than Murphy Oil.

Valuation and Earnings

This table compares Murphy Oil and Vermilion Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Murphy Oil $2.23 billion 2.20 -$311.78 million ($1.80) -15.74
Vermilion Energy $666.64 million 6.50 -$120.87 million $0.34 104.71

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

Profitability

This table compares Murphy Oil and Vermilion Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Murphy Oil -14.31% -0.45% -0.22%
Vermilion Energy 4.45% 3.92% 1.56%

Insider & Institutional Ownership

97.0% of Murphy Oil shares are held by institutional investors. Comparatively, 53.1% of Vermilion Energy shares are held by institutional investors. 6.9% of Murphy Oil 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

Vermilion Energy beats Murphy Oil on 11 of the 16 factors compared between the two stocks.

Murphy Oil Company Profile

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company. The Company’s exploration and production business explores for and produces crude oil, natural gas and natural gas liquids across the world. Its exploration and production activities are subdivided into four geographic segments: the United States, Canada, Malaysia and all other countries. It explores for and produces crude oil, natural gas and natural gas liquids around the world. This business maintains upstream operating offices in several locations around the world, including Houston, Texas, Calgary, Alberta, and Kuala Lumpur, Malaysia. As of December 31, 2016, Murphy’s principal exploration and production activities were conducted in the United States by Murphy Exploration & Production Company-USA (Murphy Expro USA), in Malaysia, Australia, Brunei, and Vietnam by Murphy Exploration & Production Company-International (Murphy Expro International) and its subsidiaries, and in Western Canada.

Vermilion Energy Company Profile

Vermilion Energy Inc. produces oil and gas, and focuses on the acquisition, development and optimization of producing properties in North America, the Europe and Australia. Its segments include Canada, which includes production and assets focused in West Pembina near Drayton Valley, Alberta and Northgate in southeast Saskatchewan; France, which produces oil in France; Netherlands, which produces onshore gas and interests include over 24 onshore licenses and two offshore licenses; Germany, which holds interest in a four partner consortium; Ireland, which includes a non-operating interest in the offshore Corrib gas field located approximately 83 kilometers off the northwest coast of Ireland; Australia, which holds an operated working interest in the Wandoo field located approximately 80 kilometers offshore on the northwest shelf of Australia; the United States, which has interests in approximately 97,200 net acres of land in the Powder River Basin of northeastern Wyoming, and Corporate.

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