Comparing Enerflex (NYSE:EFXT) & Birchcliff Energy (OTCMKTS:BIREF)

Enerflex (NYSE:EFXT) and Birchcliff Energy (OTCMKTS:BIREF) are both small-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Enerflex and Birchcliff Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enerflex	3.18%	5.23%	1.93%
Birchcliff Energy	21.85%	6.09%	3.97%

Insider and Institutional Ownership

46.5% of Enerflex shares are held by institutional investors. Comparatively, 0.8% of Birchcliff Energy shares are held by institutional investors. 1.5% of Birchcliff Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Enerflex and Birchcliff Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enerflex	$2.41 billion	0.40	$32.00 million	$0.59	13.25
Birchcliff Energy	$428.33 million	3.46	$40.94 million	$0.35	15.54

Birchcliff Energy has lower revenue, but higher earnings than Enerflex. Enerflex is trading at a lower price-to-earnings ratio than Birchcliff Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Enerflex pays an annual dividend of $0.11 per share and has a dividend yield of 1.4%. Birchcliff Energy pays an annual dividend of $0.09 per share and has a dividend yield of 1.7%. Enerflex pays out 18.6% of its earnings in the form of a dividend. Birchcliff Energy pays out 25.7% 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. Enerflex has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Enerflex and Birchcliff Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enerflex	0	1	1	0	2.50
Birchcliff Energy	0	0	1	6	3.86

Enerflex presently has a consensus target price of $10.63, suggesting a potential upside of 35.96%. Given Enerflex’s higher probable upside, analysts clearly believe Enerflex is more favorable than Birchcliff Energy.

Volatility and Risk

Enerflex has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, Birchcliff Energy has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Summary

Birchcliff Energy beats Enerflex on 10 of the 17 factors compared between the two stocks.

About Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.

About Birchcliff Energy

Birchcliff Energy Ltd., an intermediate oil and natural gas company, explores for, develops, and produces natural gas, light oil, condensate, and other natural gas liquids in Western Canada. The company holds interests in the areas of Montney/Doig Resource Play, including the Pouce Coupe and Gordondale properties in Alberta. Birchcliff Energy Ltd. was founded in 2004 and is headquartered in Calgary, Canada.