Analyzing ExxonMobil (NYSE:XOM) and Canadian Natural Resources (NYSE:CNQ)

Canadian Natural Resources (NYSE:CNQ) and ExxonMobil (NYSE:XOM) are both large-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Profitability

This table compares Canadian Natural Resources and ExxonMobil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	22.78%	23.91%	11.45%
ExxonMobil	8.88%	13.14%	7.62%

Volatility & Risk

Canadian Natural Resources has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, ExxonMobil has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Dividends

Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.2%. ExxonMobil pays an annual dividend of $4.12 per share and has a dividend yield of 2.2%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. ExxonMobil pays out 53.0% 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. Canadian Natural Resources has increased its dividend for 24 consecutive years and ExxonMobil has increased its dividend for 42 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

74.0% of Canadian Natural Resources shares are owned by institutional investors. Comparatively, 61.8% of ExxonMobil shares are owned by institutional investors. 5.0% of Canadian Natural Resources shares are owned by company insiders. Comparatively, 0.0% of ExxonMobil shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Canadian Natural Resources and ExxonMobil”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$31.61 billion	3.63	$7.74 billion	$4.05	13.78
ExxonMobil	$361.06 billion	2.16	$28.84 billion	$7.77	24.23

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

Analyst Recommendations

This is a breakdown of current ratings for Canadian Natural Resources and ExxonMobil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	4	6	1	2.73
ExxonMobil	0	14	11	1	2.50

Canadian Natural Resources presently has a consensus target price of $57.00, indicating a potential upside of 2.12%. ExxonMobil has a consensus target price of $167.70, indicating a potential downside of 10.94%. Given Canadian Natural Resources’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Canadian Natural Resources is more favorable than ExxonMobil.

Summary

Canadian Natural Resources beats ExxonMobil on 11 of the 17 factors compared between the two stocks.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

About ExxonMobil

ExxonMobil Corporation engages in the exploration and production of crude oil and natural gas in the United States and internationally. It operates through Upstream, Energy Products, Chemical Products, and Specialty Products segments. The Upstream segment explores for and produces crude oil and natural gas. The Energy Products segment offers fuels, aromatics, catalysts, and licensing services. It sells its products under the Exxon, Esso, and Mobil brands. The Chemical Products segment manufactures and markets petrochemicals, including olefins, polyolefins, and intermediates. The Specialty Products segment offers performance products, including lubricants, basestocks, waxes, synthetics, elastomers, and resins. The company is also involved in the manufacturing, trade, transport, and selling crude oil, natural gas, petroleum products, petrochemicals, and other specialty products in pursuit of lower-emission business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. Exxon Mobil Corporation was founded in 1870 and is based in Spring, Texas.