Financial Review: Ecopetrol (EC) versus Its Rivals

Ecopetrol (NYSE: EC) is one of 23 public companies in the “Integrated Oil & Gas” industry, but how does it contrast to its rivals? We will compare Ecopetrol to similar companies based on the strength of its valuation, risk, analyst recommendations, dividends, profitability, earnings and institutional ownership.

Institutional & Insider Ownership

2.2% of Ecopetrol shares are held by institutional investors. Comparatively, 40.0% of shares of all “Integrated Oil & Gas” companies are held by institutional investors. 9.8% of shares of all “Integrated Oil & Gas” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Ecopetrol and its rivals revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Ecopetrol $15,751.68 $3,182.24 25.61
Ecopetrol Competitors $78,294.44 $113.43 -14.10

Ecopetrol’s rivals have higher revenue, but lower earnings than Ecopetrol. Ecopetrol is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Ecopetrol pays an annual dividend of $0.16 per share and has a dividend yield of 1.4%. Ecopetrol pays out 36.4% of its earnings in the form of a dividend. As a group, “Integrated Oil & Gas” companies pay a dividend yield of 2.5% and pay out 153.8% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ecopetrol and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecopetrol 0 4 2 0 2.33
Ecopetrol Competitors 216 658 774 31 2.37

Ecopetrol currently has a consensus price target of $10.00, suggesting a potential downside of 11.27%. As a group, “Integrated Oil & Gas” companies have a potential upside of 8.48%. Given Ecopetrol’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Ecopetrol has less favorable growth aspects than its rivals.

Profitability

This table compares Ecopetrol and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ecopetrol 5.04% 3.60% 1.34%
Ecopetrol Competitors -6.21% 2.47% 1.19%

Risk and Volatility

Ecopetrol has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Ecopetrol’s rivals have a beta of 1.40, suggesting that their average stock price is 40% more volatile than the S&P 500.

Summary

Ecopetrol rivals beat Ecopetrol on 9 of the 15 factors compared.

Ecopetrol Company Profile

Ecopetrol S.A. is an oil company. The Company operates in Colombia, Peru, Brazil and the United States Gulf Coast. The Company’s segments include Exploration and Production, Transportation and Logistics, and Refining, Petrochemicals and Biofuels. The Company’s Exploration and Production segment includes exploration, development and production activities in Colombia and abroad. The Company’s Transportation and Logistics segment includes the transportation of crude oil, motor fuels, fuel oil and other refined products, including diesel and biofuels. The Company’s main crude oil pipeline systems’ operating capacity is approximately 1.34 million barrels per day (BPD). The Company’s main refineries are the Barrancabermeja refinery, which it directly owns and operates, and a refinery in the Free Trade Zone in Cartagena that is operated by Reficar S.A., a subsidiary of the Company. The Company also owns and operates two other minor refineries: Orito and Apiay.

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