ENI (NYSE:E) vs. Golar LNG (NASDAQ:GLNG) Critical Review

ENI (NYSE:E) and Golar LNG (NASDAQ:GLNG) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Volatility & Risk

ENI has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Golar LNG has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares ENI and Golar LNG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ENI	2.85%	9.16%	3.51%
Golar LNG	1.04%	6.82%	3.98%

Dividends

ENI pays an annual dividend of $1.57 per share and has a dividend yield of 4.8%. Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. ENI pays out 94.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golar LNG pays out 3,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golar LNG has raised its dividend for 2 consecutive years. ENI is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for ENI and Golar LNG, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ENI	0	8	2	0	2.20
Golar LNG	0	0	5	2	3.29

ENI presently has a consensus target price of $31.60, indicating a potential downside of 4.18%. Golar LNG has a consensus target price of $49.70, indicating a potential upside of 19.59%. Given Golar LNG’s stronger consensus rating and higher probable upside, analysts plainly believe Golar LNG is more favorable than ENI.

Earnings & Valuation

This table compares ENI and Golar LNG”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ENI	$98.71 billion	0.56	$2.84 billion	$1.67	19.75
Golar LNG	$260.37 million	16.69	$50.84 million	$0.03	1,385.33

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

Institutional and Insider Ownership

1.2% of ENI shares are owned by institutional investors. Comparatively, 92.2% of Golar LNG shares are owned by institutional investors. 0.0% of ENI shares are owned by insiders. Comparatively, 0.0% of Golar LNG shares are owned by 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.

Summary

Golar LNG beats ENI on 10 of the 18 factors compared between the two stocks.

About ENI

Eni SpA engages in the exploration, production, refining, and sale of oil, gas, electricity, and chemicals. It operates through the following segments: Exploration and Production, Global Gas and LNG Portfolio, Refining & Marketing and Chemicals, Power & Renewables, and Corporate and Other Activities. The Exploration and Production segment engages in research, development and production of oil, condensates and natural gas, forestry conservation (REDD+) and CO2 capture and storage projects. The Global Gas and LNG Portfolio segment refers to the supply and sale of wholesale natural gas by pipeline, international transport and purchase and marketing of LNG, which includes gas trading activities finalized to hedging and stabilizing the trade margins, as well as optimizing the gas asset portfolio. The Refining & Marketing and Chemicals segment engages in supply, processing, distribution, and marketing of fuels and chemicals. The Corporate and Other Activities segment includes the main business support functions in particular holding, central treasury, IT, human resources, real estate services, captive insurance activities, research and development, new technologies, business digitalization, and environmental activities. The company was founded on February 10, 1953 and is headquartered in Rome, Italy.

About Golar LNG

Golar LNG Limited designs, converts, owns, and operates marine infrastructure for the liquefaction of natural gas. The company operates through three segments: FLNG, Corporate and Other, and Shipping. It engages in the regasification, storage, and offloading of liquefied natural gas (LNG); operation of floating liquefaction natural gas (FLNG) vessels or projects; transportation of LNG carriers; and vessel management activities. Golar LNG Limited was founded in 1946 and is headquartered in Hamilton, Bermuda.