Critical Analysis: Ecopetrol (EC) versus The Competition

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

Valuation & Earnings

This table compares Ecopetrol and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Ecopetrol $15.75 billion $3.18 billion 25.50
Ecopetrol Competitors $78.29 billion $113.43 million -9.62

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ecopetrol and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecopetrol 0 4 2 0 2.33
Ecopetrol Competitors 216 660 774 31 2.37

Ecopetrol currently has a consensus price target of $10.00, indicating a potential downside of 10.87%. As a group, “Integrated Oil & Gas” companies have a potential upside of 24.81%. Given Ecopetrol’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Ecopetrol has less favorable growth aspects than its competitors.

Volatility & Risk

Ecopetrol has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Ecopetrol’s competitors have a beta of 1.44, indicating that their average stock price is 44% more volatile than the S&P 500.

Insider & Institutional Ownership

2.2% of Ecopetrol shares are owned by institutional investors. Comparatively, 40.0% of shares of all “Integrated Oil & Gas” companies are owned by institutional investors. 9.8% of shares of all “Integrated Oil & Gas” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Ecopetrol and its competitors’ 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 -6.15% 2.75% 1.32%

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 3.7% and pay out 183.7% of their earnings in the form of a dividend.

Summary

Ecopetrol competitors 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.

What are top analysts saying about Ecopetrol S.A.? - Enter your email address in the form below to receive our free daily email newsletter that contains the latest headlines and analysts' recommendations for for Ecopetrol S.A. and related companies.

Comments

Leave a Reply


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on Google Plus
share on reddit