Critical Analysis: Enerplus (NYSE:ERF) versus Berry (NASDAQ:BRY)

Enerplus (NYSE:ERFGet Rating) and Berry (NASDAQ:BRYGet Rating) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Enerplus and Berry, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enerplus 0 1 7 0 2.88
Berry 1 1 3 0 2.40

Enerplus currently has a consensus price target of $19.69, indicating a potential upside of 57.25%. Berry has a consensus price target of $13.00, indicating a potential upside of 12.55%. Given Enerplus’ stronger consensus rating and higher probable upside, analysts plainly believe Enerplus is more favorable than Berry.

Dividends

Enerplus pays an annual dividend of $0.13 per share and has a dividend yield of 1.0%. Berry pays an annual dividend of $0.24 per share and has a dividend yield of 2.1%. Enerplus pays out 17.6% of its earnings in the form of a dividend. Berry pays out -120.0% 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. Enerplus has increased its dividend for 2 consecutive years. Berry is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

52.2% of Enerplus shares are owned by institutional investors. Comparatively, 96.1% of Berry shares are owned by institutional investors. 1.0% of Berry shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Enerplus and Berry’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enerplus 16.32% 53.28% 14.21%
Berry -2.85% 3.07% 1.46%

Valuation & Earnings

This table compares Enerplus and Berry’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enerplus $963.90 million 3.14 $234.44 million $0.74 16.92
Berry $544.95 million 1.71 -$15.54 million ($0.20) -57.75

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

Volatility & Risk

Enerplus has a beta of 2.72, meaning that its share price is 172% more volatile than the S&P 500. Comparatively, Berry has a beta of 2.58, meaning that its share price is 158% more volatile than the S&P 500.

Summary

Enerplus beats Berry on 13 of the 17 factors compared between the two stocks.

Enerplus Company Profile (Get Rating)

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The company's oil and natural gas properties are located primarily in North Dakota, Colorado, and Pennsylvania; and Alberta, British Columbia, and Saskatchewan. As of December 31, 2021, it had proved plus probable gross reserves of approximately 8.2 million barrels (MMbbls) of light and medium crude oil; 20.7 MMbbls of heavy crude oil; 299.3 MMbbls of tight oil; 56.2 MMbbls of natural gas liquids; 19.7 billion cubic feet (Bcf) of conventional natural gas; and 1,367.9 Bcf of shale gas. Enerplus Corporation was founded in 1986 and is headquartered in Calgary, Canada.

Berry Company Profile (Get Rating)

Berry Petroleum Company, LLC., formerly Berry Petroleum Company, is an independent energy company. The Company is engaged in the production, development, exploitation, and acquisition of oil and natural gas. The Company’s principal reserves and producing properties are located in California (South Midway-Sunset (SMWSS)-Steam Floods, North Midway-Sunset (NMWSS)-Diatomite, NMWSS-New Steam Floods, Texas (Permian and E. Texas), Utah (Uinta) and Colorado (Piceance). The Company’s operations are conducted in the continental United States. In December 2013, Linn Energy LLC and Linn Co, LLC (Linn Co) announced the completion of the merger between LinnCo and Berry Petroleum Company (Berry), where LinnCo had acquired all of Berry’s interest.

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