Comparing Baytex Energy (NYSE:BTE) & Shell (NYSE:SHEL)

Baytex Energy (NYSE:BTE) and Shell (NYSE:SHEL) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Dividends

Baytex Energy pays an annual dividend of $0.06 per share and has a dividend yield of 1.2%. Shell pays an annual dividend of $3.12 per share and has a dividend yield of 3.1%. Baytex Energy pays out -9.0% of its earnings in the form of a dividend. Shell pays out 34.4% 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 and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baytex Energy	$2.56 billion	1.32	-$432.12 million	($0.67)	-7.28
Shell	$273.73 billion	1.04	$17.84 billion	$9.06	11.21

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Baytex Energy and Shell, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baytex Energy	0	6	2	3	2.73
Shell	0	9	7	2	2.61

Shell has a consensus target price of $106.63, suggesting a potential upside of 4.97%. Given Shell’s higher probable upside, analysts plainly believe Shell is more favorable than Baytex Energy.

Institutional and Insider Ownership

46.1% of Baytex Energy shares are owned by institutional investors. Comparatively, 28.6% of Shell shares are owned by institutional investors. 0.8% of Baytex Energy shares are owned by company insiders. Comparatively, 1.0% of Shell shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Baytex Energy and Shell’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baytex Energy	-26.43%	-7.77%	-4.86%
Shell	8.55%	14.34%	6.74%

Risk and Volatility

Baytex Energy has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Shell has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Summary

Shell beats Baytex Energy on 11 of the 17 factors compared between the two stocks.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.

About Shell

Shell plc operates as an energy and petrochemical company Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. It explores for and extracts crude oil, natural gas, and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products; and operates upstream and midstream infrastructure to deliver gas to market. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, carbon-emission rights; and markets and sells LNG as a fuel for heavy-duty vehicles. In addition, it trades in and refines crude oil and other feed stocks, such as low-carbon fuels, lubricants, bitumen, sulphur, gasoline, diesel, aviation fuel, and marine fuel; produces and sells petrochemicals for industrial use; and manages oil sands activities. Further, the company produces base chemicals comprising ethylene, propylene, and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide, and ethylene glycol. Additionally, it generates electricity through wind and solar resources; produces and sells hydrogen; and provides electric vehicle charging services. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc in January 2022. Shell plc was founded in 1907 and is headquartered in London, the United Kingdom.