Head-To-Head Review: EOG Resources (NYSE:EOG) and EQT (NYSE:EQT)

EOG Resources (NYSE:EOG) and EQT (NYSE:EQT) are both large-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Insider and Institutional Ownership

89.9% of EOG Resources shares are held by institutional investors. Comparatively, 90.8% of EQT shares are held by institutional investors. 0.1% of EOG Resources shares are held by insiders. Comparatively, 0.7% of EQT shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for EOG Resources and EQT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EOG Resources	0	11	9	1	2.52
EQT	1	5	13	0	2.63

EOG Resources currently has a consensus target price of $140.7143, suggesting a potential upside of 19.66%. EQT has a consensus target price of $60.3158, suggesting a potential upside of 19.30%. Given EOG Resources’ higher possible upside, equities analysts plainly believe EOG Resources is more favorable than EQT.

Earnings & Valuation

This table compares EOG Resources and EQT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EOG Resources	$22.71 billion	2.83	$6.40 billion	$10.29	11.43
EQT	$5.27 billion	5.98	$230.58 million	$1.85	27.33

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

Profitability

This table compares EOG Resources and EQT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EOG Resources	25.25%	20.51%	12.93%
EQT	15.87%	6.24%	3.70%

Risk and Volatility

EOG Resources has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, EQT has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Dividends

EOG Resources pays an annual dividend of $4.08 per share and has a dividend yield of 3.5%. EQT pays an annual dividend of $0.63 per share and has a dividend yield of 1.2%. EOG Resources pays out 39.7% of its earnings in the form of a dividend. EQT pays out 34.1% 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. EOG Resources has increased its dividend for 8 consecutive years and EQT has increased its dividend for 3 consecutive years. EOG Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

EOG Resources beats EQT on 11 of the 18 factors compared between the two stocks.

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About EQT

EQT Corporation operates as a natural gas production company in the United States. The company sells natural gas and natural gas liquids to marketers, utilities, and industrial customers through pipelines located in the Appalachian Basin. It also offers marketing services and contractual pipeline capacity management services. The company was formerly known as Equitable Resources Inc. and changed its name to EQT Corporation in February 2009. EQT Corporation was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania.