Critical Comparison: QEP Resources (QEP) vs. Vermilion Energy (VET)

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

Earnings and Valuation

This table compares QEP Resources and Vermilion Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QEP Resources $1.62 billion 1.53 $269.30 million $0.77 13.65
Vermilion Energy $789.86 million 5.60 $48.02 million $0.51 56.90

QEP Resources has higher revenue and earnings than Vermilion Energy. QEP Resources 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 QEP Resources and Vermilion Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QEP Resources -13.63% 5.96% 2.91%
Vermilion Energy -5.09% 3.16% 1.29%

Analyst Ratings

This is a breakdown of recent ratings for QEP Resources and Vermilion Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QEP Resources 1 8 6 0 2.33
Vermilion Energy 0 1 5 0 2.83

QEP Resources currently has a consensus price target of $13.52, suggesting a potential upside of 28.62%. Vermilion Energy has a consensus price target of $46.50, suggesting a potential upside of 60.23%. Given Vermilion Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Vermilion Energy is more favorable than QEP Resources.

Insider & Institutional Ownership

99.2% of QEP Resources shares are held by institutional investors. Comparatively, 53.3% of Vermilion Energy shares are held by institutional investors. 1.6% of QEP Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Vermilion Energy pays an annual dividend of $2.12 per share and has a dividend yield of 7.3%. QEP Resources does not pay a dividend. Vermilion Energy pays out 415.7% 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

QEP Resources has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Vermilion Energy has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Summary

QEP Resources beats Vermilion Energy on 10 of the 16 factors compared between the two stocks.

About QEP Resources

QEP Resources, Inc., through its subsidiaries, operates as a natural gas and crude oil exploration and production company in the United States. The company conducts exploration and production activities in the Permian Basin in western Texas, Williston Basin in North Dakota, Haynesville/Cotton Valley in northwestern Louisiana, Uinta Basin in eastern Utah, and other proven properties in Wyoming, Utah, and Colorado. As of December 31, 2017, it had estimated proved reserves of 684.7 MMboe. The company sells its gas, oil, and natural gas liquids (NGL) to various customers, including wholesale marketers, industrial users, local distribution companies, utilities, and other companies. In addition, it operates an underground gas storage facility. QEP Resources, Inc. is headquartered in Denver, Colorado.

About Vermilion Energy

Vermilion Energy Inc. acquires, explores, develops, and produces crude petroleum and natural gas. As of December 31, 2017, it owned 74% interest in 330,900 net acres of developed land and 87% interest in 376,400 net acres of undeveloped land, as well as 375 net producing natural gas wells and 475 net producing oil wells in Canada; and 96% interest in 208,900 net acres of developed land and 99% interest in 379,800 net acres of undeveloped land in the Aquitaine and Paris Basins, as well as 332 net producing oil wells and 3 net producing gas wells in France. The company also owned 56% interest in 826,000 net acres of land, as well as 37 net producing gas wells in the Netherlands; 32,600 net acres of developed and 1,214,000 net acres of undeveloped land, as well as 104 net producing oil wells and 7 net producing natural gas wells in Germany; and 97,200 net acres of land and 11 net producing oil wells in the United States. In addition, it holds 18.5% interest in the offshore Corrib gas field in Ireland; and 60% interest in the Wandoo field that consists of 59,600 acres located in Australia. Further, the company has 81,322 barrels of oil equivalent (Mboe) of total proved reserves and 139,209 Mboe of proved plus probable reserves located in Canada; 42,093 Mboe of total proved reserves and 64,188 Mboe of proved plus probable reserves situated in France; 10,347 Mboe of total proved reserves and 17,863 Mboe of proved plus probable reserves located in the Netherlands; 12,640 Mboe of total proved reserves and 24,496 Mboe of proved plus probable reserves situated in Germany; 13,634 Mboe of total proved reserves and 22,199 Mboe of proved plus probable reserves in Ireland; 10,915 Mboe of total proved reserves and 15,565 Mboe of proved plus probable reserves located in Australia; and 5,613 Mboe of total proved reserves and 14,970 Mboe of proved plus probable reserves located in the United States. Vermilion Energy Inc. was founded in 1994 and is headquartered in Calgary, Canada.

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