Head to Head Review: ConocoPhillips (NYSE:COP) versus Epsilon Energy (NASDAQ:EPSN)

ConocoPhillips (NYSE:COP) and Epsilon Energy (NASDAQ:EPSN) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Institutional & Insider Ownership

82.4% of ConocoPhillips shares are held by institutional investors. Comparatively, 60.3% of Epsilon Energy shares are held by institutional investors. 0.2% of ConocoPhillips shares are held by insiders. Comparatively, 7.1% of Epsilon Energy shares are held 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.

Valuation & Earnings

This table compares ConocoPhillips and Epsilon Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ConocoPhillips	$56.95 billion	2.10	$9.25 billion	$7.45	12.85
Epsilon Energy	$31.52 million	4.16	$1.93 million	$0.24	24.75

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

Risk and Volatility

ConocoPhillips has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Epsilon Energy has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for ConocoPhillips and Epsilon Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ConocoPhillips	0	4	16	0	2.80
Epsilon Energy	0	0	1	1	3.50

ConocoPhillips currently has a consensus target price of $120.95, indicating a potential upside of 26.39%. Epsilon Energy has a consensus target price of $7.70, indicating a potential upside of 29.63%. Given Epsilon Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Epsilon Energy is more favorable than ConocoPhillips.

Dividends

ConocoPhillips pays an annual dividend of $3.12 per share and has a dividend yield of 3.3%. Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.2%. ConocoPhillips pays out 41.9% of its earnings in the form of a dividend. Epsilon Energy pays out 104.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares ConocoPhillips and Epsilon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ConocoPhillips	15.26%	14.60%	7.68%
Epsilon Energy	11.75%	6.71%	5.39%

Summary

ConocoPhillips beats Epsilon Energy on 10 of the 17 factors compared between the two stocks.

About ConocoPhillips

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.