Murphy Oil (NYSE:MUR) and Ovintiv (NYSE:OVV) Critical Survey

Murphy Oil (NYSE:MUR) and Ovintiv (NYSE:OVV) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Profitability

This table compares Murphy Oil and Ovintiv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	13.44%	7.66%	4.28%
Ovintiv	20.15%	17.87%	9.35%

Insider & Institutional Ownership

78.3% of Murphy Oil shares are held by institutional investors. Comparatively, 83.8% of Ovintiv shares are held by institutional investors. 5.9% of Murphy Oil shares are held by insiders. Comparatively, 1.7% of Ovintiv shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Murphy Oil has a beta of 2.18, suggesting that its share price is 118% more volatile than the S&P 500. Comparatively, Ovintiv has a beta of 2.55, suggesting that its share price is 155% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Murphy Oil and Ovintiv, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	1	9	4	0	2.21
Ovintiv	0	4	13	1	2.83

Murphy Oil presently has a consensus price target of $35.46, suggesting a potential upside of 32.69%. Ovintiv has a consensus price target of $56.61, suggesting a potential upside of 37.89%. Given Ovintiv’s stronger consensus rating and higher probable upside, analysts clearly believe Ovintiv is more favorable than Murphy Oil.

Dividends

Murphy Oil pays an annual dividend of $1.30 per share and has a dividend yield of 4.9%. Ovintiv pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Murphy Oil pays out 48.3% of its earnings in the form of a dividend. Ovintiv pays out 28.6% 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.

Earnings & Valuation

This table compares Murphy Oil and Ovintiv”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$3.02 billion	1.29	$407.17 million	$2.69	9.93
Ovintiv	$9.15 billion	1.17	$2.09 billion	$4.20	9.78

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

Summary

Ovintiv beats Murphy Oil on 13 of the 17 factors compared between the two stocks.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.

About Ovintiv

Ovintiv Inc., together with its subsidiaries, explores, develops, produces, and markets natural gas, oil, and natural gas liquids in the United States and Canada. The company operates through USA Operations, Canadian Operations, and Market Optimization segments. Its principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. In addition, the company's upstream assets comprise Bakken in northwest North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. was incorporated in 2020 and is based in Denver, Colorado.