Critical Analysis: Ovintiv (NYSE:OVV) and Riley Exploration Permian (NYSE:REPX)

Ovintiv (NYSE:OVVGet Rating) and Riley Exploration Permian (NYSE:REPXGet Rating) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Dividends

Ovintiv pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Riley Exploration Permian pays an annual dividend of $1.24 per share and has a dividend yield of 4.5%. Riley Exploration Permian pays out 387.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ovintiv has increased its dividend for 2 consecutive years.

Risk and Volatility

Ovintiv has a beta of 3.17, suggesting that its share price is 217% more volatile than the S&P 500. Comparatively, Riley Exploration Permian has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Ovintiv and Riley Exploration Permian, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ovintiv 0 3 15 0 2.83
Riley Exploration Permian 0 0 1 0 3.00

Ovintiv currently has a consensus target price of $59.17, indicating a potential downside of 2.37%. Riley Exploration Permian has a consensus target price of $52.00, indicating a potential upside of 89.99%. Given Riley Exploration Permian’s stronger consensus rating and higher possible upside, analysts plainly believe Riley Exploration Permian is more favorable than Ovintiv.

Valuation & Earnings

This table compares Ovintiv and Riley Exploration Permian’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ovintiv $8.66 billion 1.81 $1.42 billion N/A N/A
Riley Exploration Permian $151.04 million 3.54 -$65.67 million $0.32 85.53

Ovintiv has higher revenue and earnings than Riley Exploration Permian.

Insider & Institutional Ownership

77.0% of Ovintiv shares are held by institutional investors. Comparatively, 58.1% of Riley Exploration Permian shares are held by institutional investors. 1.7% of Ovintiv shares are held by insiders. Comparatively, 3.3% of Riley Exploration Permian 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.

Profitability

This table compares Ovintiv and Riley Exploration Permian’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ovintiv 9.86% 60.01% 18.62%
Riley Exploration Permian 3.89% 27.96% 15.03%

Summary

Ovintiv beats Riley Exploration Permian on 11 of the 16 factors compared between the two stocks.

Ovintiv Company Profile (Get Rating)

Ovintiv Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. It operates through USA Operations, Canadian Operations, and Market Optimization segments. The company's principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. Its other upstream assets comprise Bakken in North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia, and Wheatland in southern Alberta. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. was incorporated in 2020 and is based in Denver, Colorado.

Riley Exploration Permian Company Profile (Get Rating)

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the San Andres Formation, a shelf margin deposit on the Central Basin Platform and Northwest Shelf. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Lea and Roosevelt Counties, New Mexico. As of September 30, 2021, the company had approximately 31,352 net acres and a total of 77 net producing wells. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.

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