Comparing Statoil (STO) & CNOOC (CEO)

Statoil (NYSE: STO) and CNOOC (NYSE:CEO) are both large-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Earnings & Valuation

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This table compares Statoil and CNOOC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Statoil $61.19 billion 1.39 $4.59 billion $1.38 18.54
CNOOC $27.58 billion 2.58 $3.65 billion $9.30 17.11

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

Profitability

This table compares Statoil and CNOOC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil 7.50% 11.86% 4.11%
CNOOC N/A N/A N/A

Dividends

Statoil pays an annual dividend of $0.54 per share and has a dividend yield of 2.1%. CNOOC pays an annual dividend of $4.92 per share and has a dividend yield of 3.1%. Statoil pays out 39.1% of its earnings in the form of a dividend. CNOOC pays out 52.9% 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. Statoil has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Statoil and CNOOC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil 3 11 2 0 1.94
CNOOC 0 1 4 1 3.00

Statoil presently has a consensus target price of $21.00, suggesting a potential downside of 17.90%. CNOOC has a consensus target price of $72.32, suggesting a potential downside of 54.55%. Given Statoil’s higher probable upside, analysts plainly believe Statoil is more favorable than CNOOC.

Volatility and Risk

Statoil has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, CNOOC has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Institutional and Insider Ownership

5.1% of Statoil shares are owned by institutional investors. Comparatively, 1.6% of CNOOC shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Statoil beats CNOOC on 10 of the 17 factors compared between the two stocks.

About Statoil

Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development and Production Norway; Development and Production International; Marketing, Midstream and Processing; and Other segments. The company also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas (LNG); markets and trades electricity and emission rights; and operates refineries, gas processing plants, LNG plant, methanol plant, and crude oil terminals. In addition, the company develops offshore wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2016, it had proved reserves of 5,013 million barrels of oil equivalent. The company was formerly known as StatoilHydro ASA and changed its name to Statoil ASA in November 2009. Statoil ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About CNOOC

CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The Company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The Corporate segment is engaged in corporate-related businesses. The Company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.

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