Contrasting Statoil ASA (STO) & CNOOC (CEO)

Statoil ASA (NYSE: STO) and CNOOC (NYSE:CEO) are both large-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Dividends

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Statoil ASA pays an annual dividend of $0.54 per share and has a dividend yield of 2.3%. CNOOC pays an annual dividend of $4.92 per share and has a dividend yield of 3.4%. Statoil ASA pays out 38.8% of its earnings in the form of a dividend. CNOOC has raised its dividend for 5 consecutive years. CNOOC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Statoil ASA and CNOOC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil ASA 7.50% 11.86% 4.11%
CNOOC N/A N/A N/A

Analyst Recommendations

This is a summary of current recommendations and price targets for Statoil ASA and CNOOC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil ASA 2 12 2 0 2.00
CNOOC 0 1 5 1 3.00

Statoil ASA presently has a consensus price target of $21.00, indicating a potential downside of 9.64%. CNOOC has a consensus price target of $72.32, indicating a potential downside of 49.89%. Given Statoil ASA’s higher probable upside, research analysts plainly believe Statoil ASA is more favorable than CNOOC.

Insider and Institutional Ownership

5.1% of Statoil ASA shares are owned by institutional investors. Comparatively, 1.6% of CNOOC shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Statoil ASA and CNOOC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Statoil ASA $61.19 billion 1.26 $4.59 billion $1.39 16.72
CNOOC $22.06 billion 2.92 $92.00 million N/A N/A

Statoil ASA has higher revenue and earnings than CNOOC.

Volatility and Risk

Statoil ASA has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, CNOOC has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Summary

CNOOC beats Statoil ASA on 8 of the 15 factors compared between the two stocks.

About Statoil ASA

Statoil ASA (Statoil) is an energy company. The Company is engaged in oil and gas exploration and production activities. The Company’s segments include Development and Production Norway (DPN), Development and Production International (DPI), Marketing, Midstream and Processing (MMP) and Other. DPN segment manages the Company’s upstream activities on the Norwegian continental shelf (NCS) and explores for and extracts crude oil, natural gas and natural gas liquids. DPI segment manages the Company’s upstream activities that are not included in the DPN and Development and Production USA (DPUSA) business areas. MMP segment manages its marketing and trading activities related to oil products and natural gas, transportation, processing and manufacturing, and the development of oil and gas. Other segment includes activities in New Energy Solutions (NES), Technology, Projects and Drilling (TPD), Global Strategy and Business Development (GSB), and Corporate staffs and support functions.

About CNOOC

CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The Company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The Corporate segment is engaged in corporate-related businesses. The Company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.

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