Reviewing Ovintiv (NYSE:OVV) and TC Energy (NYSE:TRP)

Ovintiv (NYSE:OVV) and TC Energy (NYSE:TRP) are both large-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

83.8% of Ovintiv shares are owned by institutional investors. Comparatively, 83.1% of TC Energy shares are owned by institutional investors. 0.9% of Ovintiv shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Ovintiv has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, TC Energy has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Ovintiv and TC Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ovintiv	0	3	19	1	2.91
TC Energy	0	4	10	1	2.80

Ovintiv presently has a consensus target price of $68.75, suggesting a potential upside of 10.15%. TC Energy has a consensus target price of $89.00, suggesting a potential upside of 44.81%. Given TC Energy’s higher probable upside, analysts clearly believe TC Energy is more favorable than Ovintiv.

Valuation & Earnings

This table compares Ovintiv and TC Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ovintiv	$8.91 billion	1.93	$1.24 billion	$3.54	17.63
TC Energy	$10.91 billion	5.64	$2.52 billion	$2.41	25.50

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

Profitability

This table compares Ovintiv and TC Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ovintiv	9.43%	14.84%	8.11%
TC Energy	22.91%	11.10%	3.21%

Dividends

Ovintiv pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. TC Energy pays an annual dividend of $2.47 per share and has a dividend yield of 4.0%. Ovintiv pays out 33.9% of its earnings in the form of a dividend. TC Energy pays out 102.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ovintiv has increased its dividend for 4 consecutive years and TC Energy has increased its dividend for 1 consecutive years.

Summary

Ovintiv beats TC Energy on 9 of the 17 factors compared between the two stocks.

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.

About TC Energy

TC Energy Corporation operates as an energy infrastructure company in North America. It operates through five segments: Canadian Natural Gas Pipelines; U.S. Natural Gas Pipelines; Mexico Natural Gas Pipelines; Liquids Pipelines; and Power and Energy Solutions. The company builds and operates a network of 93,600 kilometers of natural gas pipelines, which transports natural gas from supply basins to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, LNG export terminals, and other businesses. It also has regulated natural gas storage facilities with a total working gas capacity of 532 billion cubic feet. In addition, it has approximately 4,900 kilometers of liquids pipeline system that connects Alberta crude oil pipeline to refining markets in Illinois, Oklahoma, Texas, and the United States Gulf Coast. Further, the company owns or has interests in power generation facilities with approximately 4,600 megawatts; and owns and operates approximately 118 billion cubic feet of non-regulated natural gas storage facilities in in Alberta, Ontario, Québec, and New Brunswick. The company was formerly known as TransCanada Corporation and changed its name to TC Energy Corporation in May 2019. TC Energy Corporation was founded in 1951 and is headquartered in Calgary, Canada.