Critical Contrast: Peabody Energy (NYSE:BTU) vs. Equinor ASA (NYSE:EQNR)

Peabody Energy (NYSE:BTU) and Equinor ASA (NYSE:EQNR) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Peabody Energy and Equinor ASA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peabody Energy	2	1	3	0	2.17
Equinor ASA	2	12	3	1	2.17

Peabody Energy presently has a consensus target price of $34.12, indicating a potential upside of 53.65%. Equinor ASA has a consensus target price of $43.47, indicating a potential downside of 10.87%. Given Peabody Energy’s higher probable upside, research analysts plainly believe Peabody Energy is more favorable than Equinor ASA.

Dividends

Peabody Energy pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Equinor ASA pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Peabody Energy pays out -20.0% of its earnings in the form of a dividend. Equinor ASA pays out 26.6% 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. Peabody Energy has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

87.4% of Peabody Energy shares are owned by institutional investors. Comparatively, 5.5% of Equinor ASA shares are owned by institutional investors. 0.5% of Peabody Energy shares are owned by company insiders. Comparatively, 0.0% of Equinor ASA shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Peabody Energy and Equinor ASA”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peabody Energy	$3.86 billion	0.70	-$52.90 million	($1.50)	-14.81
Equinor ASA	$106.46 billion	1.10	$5.04 billion	$4.81	10.14

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

Risk and Volatility

Peabody Energy has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Equinor ASA has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Profitability

This table compares Peabody Energy and Equinor ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peabody Energy	-4.56%	-5.22%	-3.22%
Equinor ASA	9.71%	27.45%	8.43%

Summary

Equinor ASA beats Peabody Energy on 9 of the 15 factors compared between the two stocks.

About Peabody Energy

Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.

About Equinor ASA

Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. It operates through Exploration & Production Norway; Exploration & Production International; Exploration & Production USA; Marketing, Midstream & Processing; Renewables; and Other segments. The company also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; trades in power and emissions; operates refineries, terminals and processing, and power plants; and develops low carbon solutions for oil and gas. In addition, it develops carbon capture and storage projects; provides transportation solutions, including pipelines, shipping, trucking, and rail; and develops and explores for renewable energy, such as offshore wind, green hydrogen, and solar power. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was incorporated in 1972 and is headquartered in Stavanger, Norway.