Analyzing Coterra Energy (NYSE:CTRA) and Murphy Oil (NYSE:MUR)

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

Insider and Institutional Ownership

78.3% of Murphy Oil shares are held by institutional investors. Comparatively, 87.9% of Coterra Energy shares are held by institutional investors. 5.9% of Murphy Oil shares are held by company insiders. Comparatively, 1.7% of Coterra Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Murphy Oil pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Coterra Energy pays an annual dividend of $0.84 per share and has a dividend yield of 2.9%. Murphy Oil pays out 33.4% of its earnings in the form of a dividend. Coterra Energy pays out 48.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Murphy Oil has increased its dividend for 3 consecutive years and Coterra Energy has increased its dividend for 4 consecutive years. Coterra Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Murphy Oil and Coterra Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	0	5	6	0	2.55
Coterra Energy	0	2	13	0	2.87

Murphy Oil presently has a consensus target price of $50.64, indicating a potential upside of 12.65%. Coterra Energy has a consensus target price of $32.73, indicating a potential upside of 14.89%. Given Coterra Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Coterra Energy is more favorable than Murphy Oil.

Earnings & Valuation

This table compares Murphy Oil and Coterra Energy’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$3.40 billion	2.01	$661.56 million	$3.59	12.52
Coterra Energy	$5.91 billion	3.62	$1.63 billion	$1.73	16.47

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	16.40%	11.75%	6.51%
Coterra Energy	23.34%	10.75%	6.81%

Risk and Volatility

Murphy Oil has a beta of 2.22, suggesting that its stock price is 122% more volatile than the S&P 500. Comparatively, Coterra Energy has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500.

Summary

Coterra Energy beats Murphy Oil on 12 of the 17 factors compared between the two stocks.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.

About Coterra Energy

Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company's properties include the Marcellus Shale with approximately 186,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania; Permian Basin properties with approximately 296,000 net acres located in west Texas and southeast New Mexico; and Anadarko Basin properties with approximately 182,000 net acres located in Oklahoma. It also operates natural gas and saltwater gathering and disposal systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities. Coterra Energy Inc. was incorporated in 1989 and is headquartered in Houston, Texas.