Analyzing EOG Resources (NYSE:EOG) & Northern Oil and Gas (NYSE:NOG)

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

Profitability

This table compares EOG Resources and Northern Oil and Gas’ 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%
Northern Oil and Gas	23.62%	22.12%	9.49%

Dividends

EOG Resources pays an annual dividend of $4.08 per share and has a dividend yield of 3.4%. Northern Oil and Gas pays an annual dividend of $1.80 per share and has a dividend yield of 7.6%. EOG Resources pays out 39.7% of its earnings in the form of a dividend. Northern Oil and Gas pays out 29.7% 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 Northern Oil and Gas has increased its dividend for 4 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

89.9% of EOG Resources shares are owned by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are owned by institutional investors. 0.1% of EOG Resources shares are owned by company insiders. Comparatively, 2.9% of Northern Oil and Gas shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares EOG Resources and Northern Oil and Gas”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EOG Resources	$22.71 billion	2.84	$6.40 billion	$10.29	11.50
Northern Oil and Gas	$2.23 billion	1.04	$520.31 million	$6.06	3.91

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

Volatility and Risk

EOG Resources has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for EOG Resources and Northern Oil and Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EOG Resources	0	11	11	1	2.57
Northern Oil and Gas	1	4	4	1	2.50

EOG Resources presently has a consensus target price of $143.6087, suggesting a potential upside of 21.41%. Northern Oil and Gas has a consensus target price of $36.8889, suggesting a potential upside of 55.55%. Given Northern Oil and Gas’ higher probable upside, analysts plainly believe Northern Oil and Gas is more favorable than EOG Resources.

Summary

EOG Resources beats Northern Oil and Gas on 10 of the 17 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 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.