Head-To-Head Contrast: Ovintiv (NYSE:OVV) and Paramount Resources (OTCMKTS:PRMRF)

Ovintiv (NYSE:OVV) and Paramount Resources (OTCMKTS:PRMRF) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Dividends

Ovintiv pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Paramount Resources pays an annual dividend of $0.44 per share and has a dividend yield of 2.8%. Ovintiv pays out 51.1% of its earnings in the form of a dividend. Paramount Resources pays out 5.9% 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. Ovintiv has raised its dividend for 4 consecutive years. Ovintiv is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ovintiv and Paramount Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ovintiv	6.84%	14.89%	7.85%
Paramount Resources	94.21%	9.08%	7.06%

Institutional and Insider Ownership

83.8% of Ovintiv shares are owned by institutional investors. Comparatively, 4.1% of Paramount Resources shares are owned by institutional investors. 1.7% of Ovintiv shares are owned by insiders. Comparatively, 36.3% of Paramount Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Ovintiv and Paramount Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ovintiv	$9.15 billion	1.16	$1.13 billion	$2.35	17.42
Paramount Resources	$1.28 billion	1.77	$245.14 million	$7.41	2.14

Ovintiv has higher revenue and earnings than Paramount Resources. Paramount Resources is trading at a lower price-to-earnings ratio than Ovintiv, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ovintiv has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Paramount Resources has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Ovintiv and Paramount Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ovintiv	0	2	13	3	3.06
Paramount Resources	0	2	0	1	2.67

Ovintiv presently has a consensus target price of $54.59, suggesting a potential upside of 33.37%. Given Ovintiv’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Ovintiv is more favorable than Paramount Resources.

Summary

Ovintiv beats Paramount Resources on 12 of the 18 factors compared between the two stocks.

About Ovintiv

Ovintiv Inc., together with its subsidiaries, explores, develops, produces, and markets natural gas, oil, and natural gas liquids in the United States and Canada. The company operates through USA Operations, Canadian Operations, and Market Optimization segments. Its principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. In addition, the company's upstream assets comprise Bakken in northwest North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia. 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.

About Paramount Resources

Paramount Resources Ltd. explores for and develops conventional and unconventional petroleum and natural gas reserves and resources in Canada. The company holds interests in the Karr and Wapiti Montney properties covering an area of 109,000 net acres located south of the city of Grande Prairie, Alberta; Kaybob North Duvernay development and natural gas producing properties covering an area of 124,000 net acres located in west-central Alberta; and Willesden Green Duvernay development in central Alberta and shale gas producing properties in the Horn River Basin in northeast British Columbia covering an area of 249,000 net acres. The company was founded in 1976 and is based in Calgary, Canada.