Head-To-Head Review: Sasol (SSL) & Enerplus (ERF)

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Sasol (NYSE:SSL) and Enerplus (NYSE:ERF) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

2.1% of Sasol shares are held by institutional investors. Comparatively, 51.3% of Enerplus shares are held by institutional investors. 1.0% of Sasol shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Sasol and Enerplus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sasol 0 2 4 0 2.67
Enerplus 0 0 3 0 3.00

Enerplus has a consensus price target of $16.67, suggesting a potential upside of 74.52%. Given Enerplus’ stronger consensus rating and higher possible upside, analysts plainly believe Enerplus is more favorable than Sasol.

Risk and Volatility

Sasol has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Enerplus has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Earnings & Valuation

This table compares Sasol and Enerplus’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sasol $14.14 billion 1.59 $681.73 million $2.07 16.70
Enerplus $709.92 million 3.29 $182.82 million $0.80 11.94

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

Profitability

This table compares Sasol and Enerplus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sasol N/A N/A N/A
Enerplus 7.88% 8.84% 5.28%

Dividends

Sasol pays an annual dividend of $0.79 per share and has a dividend yield of 2.3%. Enerplus pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. Sasol pays out 38.2% of its earnings in the form of a dividend. Enerplus pays out 11.3% 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.

Summary

Enerplus beats Sasol on 9 of the 16 factors compared between the two stocks.

About Sasol

Sasol Limited operates as an integrated chemical and energy company in South Africa. The company operates through Mining, Exploration and Production International, Energy, Base Chemicals, and Performance Chemicals segments. It operates coal mines; and develops and manages upstream interests in oil and gas exploration and production in Mozambique, South Africa, Australia, Canada, Gabon, and Australia. The company also markets and sells gas, electricity, and liquid fuels products; and develops, implements, and manages international gas-to-liquids and coal-to-liquids ventures. In addition, it produces and markets explosives, fertilizers, polymers, and mining reagents, as well as alcohols, ketones, acrylate monomers, and other oxygenated solvemnts for use in various applications, such as aerosols, cosmetics, fragrances, packaging, paints, adhesives, pharmaceuticals, polishes, printing and plastics, mining, pulp and paper, steel, textiles, water treatment and purification, agricultural fertilizers, and chemicals. Further, the company markets organic and inorganic commodity and specialty chemicals comprising organics, inorganics, wax, phenolic, carbon, ammonia, and specialty gases; and offers engineering and project services. Sasol Limited was founded in 1950 and is headquartered in Johannesburg, South Africa.

About Enerplus

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. Its crude oil properties are located in the Fort Berthold region of North Dakota and the Elm Coulee field in Richland County, Montana; and crude oil Waterfloods in Alberta and Saskatchewan, Canada. The company's natural gas area primarily consists of its non-operated Marcellus shale gas interests located in northeastern Pennsylvania. Enerplus Corporation was founded in 1986 and is headquartered in Calgary, Canada.

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