EOG Resources (NYSE:EOG) vs. Murphy Oil (NYSE:MUR) Critical Analysis

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

Analyst Ratings

This is a breakdown of current ratings for Murphy Oil and EOG Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	0	5	6	0	2.55
EOG Resources	0	15	7	1	2.39

Murphy Oil presently has a consensus price target of $51.00, suggesting a potential upside of 28.56%. EOG Resources has a consensus price target of $142.09, suggesting a potential upside of 18.22%. Given Murphy Oil’s stronger consensus rating and higher probable upside, equities analysts clearly believe Murphy Oil is more favorable than EOG Resources.

Profitability

This table compares Murphy Oil and EOG Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	16.40%	11.75%	6.51%
EOG Resources	30.33%	24.83%	15.82%

Dividends

Murphy Oil pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. EOG Resources pays an annual dividend of $3.64 per share and has a dividend yield of 3.0%. Murphy Oil pays out 33.4% of its earnings in the form of a dividend. EOG Resources pays out 28.8% 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. Murphy Oil has raised its dividend for 4 consecutive years and EOG Resources has raised its dividend for 7 consecutive years. EOG Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Murphy Oil and EOG Resources’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$3.46 billion	1.75	$661.56 million	$3.59	11.05
EOG Resources	$24.19 billion	2.86	$7.59 billion	$12.66	9.49

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

Institutional & Insider Ownership

78.3% of Murphy Oil shares are held by institutional investors. Comparatively, 89.9% of EOG Resources shares are held by institutional investors. 5.9% of Murphy Oil shares are held by insiders. Comparatively, 0.3% of EOG Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Murphy Oil has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500. Comparatively, EOG Resources has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Summary

EOG Resources beats Murphy Oil on 13 of the 18 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 EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.