Golar LNG (NASDAQ:GLNG) versus Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) Critical Contrast

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

Dividends

Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Petroleo Brasileiro S.A.- Petrobras pays an annual dividend of $1.03 per share and has a dividend yield of 8.7%. Golar LNG pays out -1,428.6% of its earnings in the form of a dividend. Petroleo Brasileiro S.A.- Petrobras pays out 48.1% 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. Golar LNG has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Golar LNG and Petroleo Brasileiro S.A.- Petrobras, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golar LNG	0	3	4	3	3.00
Petroleo Brasileiro S.A.- Petrobras	0	3	4	1	2.75

Golar LNG presently has a consensus target price of $50.50, suggesting a potential upside of 32.48%. Petroleo Brasileiro S.A.- Petrobras has a consensus target price of $15.43, suggesting a potential upside of 30.89%. Given Golar LNG’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Golar LNG is more favorable than Petroleo Brasileiro S.A.- Petrobras.

Volatility and Risk

Golar LNG has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, Petroleo Brasileiro S.A.- Petrobras has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

92.2% of Golar LNG shares are held by institutional investors. 0.0% of Golar LNG 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.

Profitability

This table compares Golar LNG and Petroleo Brasileiro S.A.- Petrobras’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golar LNG	-2.83%	6.36%	3.44%
Petroleo Brasileiro S.A.- Petrobras	15.99%	34.11%	8.63%

Valuation and Earnings

This table compares Golar LNG and Petroleo Brasileiro S.A.- Petrobras”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golar LNG	$268.90 million	14.82	$50.84 million	($0.07)	-544.57
Petroleo Brasileiro S.A.- Petrobras	$91.42 billion	0.83	$7.53 billion	$2.14	5.51

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

Summary

Petroleo Brasileiro S.A.- Petrobras beats Golar LNG on 9 of the 17 factors compared between the two stocks.

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.

About Petroleo Brasileiro S.A.- Petrobras

Petróleo Brasileiro S.A. – Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through three segments: Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries. The Refining, Transportation and Marketing segment engages in the refining, logistics, transport, acquisition, and exports of crude oil; and production of fertilizers, as well as holding interests in petrochemical companies. The Gas and Power segment is involved in the logistic and trading of natural gas and electricity; transportation and trading of LNG; generation of electricity through thermoelectric power plants; renewable energy businesses; low carbon services; and natural gas processing business, as well as production of biodiesel and its co-products. The company also engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields, and shale or other rocks, as well as oil products, natural gas, and other liquid hydrocarbons. In addition, it engages in research, development, production, transport, distribution, and trading of energy. Petróleo Brasileiro S.A. – Petrobras was incorporated in 1953 and is headquartered in Rio de Janeiro, Brazil.