Contrasting Northern Oil and Gas (NYSE:NOG) and VAALCO Energy (NYSE:EGY)

VAALCO Energy (NYSE:EGY) and Northern Oil and Gas (NYSE:NOG) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Volatility & Risk

VAALCO Energy has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500.

Institutional & Insider Ownership

50.3% of VAALCO Energy shares are held by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are held by institutional investors. 1.3% of VAALCO Energy shares are held by company insiders. Comparatively, 2.8% of Northern Oil and Gas shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares VAALCO Energy and Northern Oil and Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VAALCO Energy	17.82%	16.00%	8.95%
Northern Oil and Gas	27.37%	31.90%	13.23%

Earnings and Valuation

This table compares VAALCO Energy and Northern Oil and Gas”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VAALCO Energy	$455.07 million	1.30	$60.35 million	$0.60	9.48
Northern Oil and Gas	$2.17 billion	1.63	$922.97 million	$6.17	5.70

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

Dividends

VAALCO Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.4%. Northern Oil and Gas pays an annual dividend of $1.60 per share and has a dividend yield of 4.5%. VAALCO Energy pays out 41.7% of its earnings in the form of a dividend. Northern Oil and Gas pays out 25.9% 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. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for VAALCO Energy and Northern Oil and Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VAALCO Energy	0	0	1	0	3.00
Northern Oil and Gas	0	2	8	1	2.91

VAALCO Energy currently has a consensus target price of $8.00, indicating a potential upside of 40.60%. Northern Oil and Gas has a consensus target price of $47.70, indicating a potential upside of 35.63%. Given VAALCO Energy’s stronger consensus rating and higher probable upside, analysts clearly believe VAALCO Energy is more favorable than Northern Oil and Gas.

Summary

Northern Oil and Gas beats VAALCO Energy on 14 of the 17 factors compared between the two stocks.

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.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.