Reviewing ConocoPhillips (NYSE:COP) and Vaalco Energy (NYSE:EGY)

ConocoPhillips (NYSE:COP) and Vaalco Energy (NYSE:EGY) are both energy companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ConocoPhillips	$61.55 billion	2.66	$7.99 billion	$7.56	18.04
Vaalco Energy	$359.27 million	1.58	-$41.39 million	($1.45)	-3.71

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ConocoPhillips and Vaalco Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ConocoPhillips	1	8	17	2	2.71
Vaalco Energy	0	2	0	0	2.00

ConocoPhillips presently has a consensus target price of $145.04, indicating a potential upside of 6.35%. Vaalco Energy has a consensus target price of $7.30, indicating a potential upside of 35.56%. Given Vaalco Energy’s higher probable upside, analysts plainly believe Vaalco Energy is more favorable than ConocoPhillips.

Dividends

ConocoPhillips pays an annual dividend of $3.36 per share and has a dividend yield of 2.5%. Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.6%. ConocoPhillips pays out 44.4% of its earnings in the form of a dividend. Vaalco Energy pays out -17.2% 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. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares ConocoPhillips and Vaalco Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ConocoPhillips	14.22%	14.72%	7.77%
Vaalco Energy	-31.11%	-14.36%	-6.41%

Volatility & Risk

ConocoPhillips has a beta of 0.16, meaning that its stock price is 84% less volatile than the S&P 500. Comparatively, Vaalco Energy has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Insider & Institutional Ownership

82.4% of ConocoPhillips shares are owned by institutional investors. Comparatively, 50.3% of Vaalco Energy shares are owned by institutional investors. 0.1% of ConocoPhillips shares are owned by company insiders. Comparatively, 3.0% of Vaalco Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

ConocoPhillips beats Vaalco Energy on 12 of the 17 factors compared between the two stocks.

About ConocoPhillips

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

About Vaalco Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.