Head-To-Head Review: Ecopetrol (NYSE:EC) and Occidental Petroleum (NYSE:OXY)

Occidental Petroleum (NYSE:OXY) and Ecopetrol (NYSE:EC) are both large-cap energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Valuation & Earnings

This table compares Occidental Petroleum and Ecopetrol”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Occidental Petroleum	$22.07 billion	2.78	$2.33 billion	$6.46	9.51
Ecopetrol	$29.56 billion	1.25	$2.10 billion	$1.89	9.48

Occidental Petroleum has higher earnings, but lower revenue than Ecopetrol. Ecopetrol is trading at a lower price-to-earnings ratio than Occidental Petroleum, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Occidental Petroleum and Ecopetrol, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Occidental Petroleum	0	15	12	0	2.44
Ecopetrol	1	6	0	1	2.12

Occidental Petroleum presently has a consensus price target of $65.92, indicating a potential upside of 7.31%. Ecopetrol has a consensus price target of $15.34, indicating a potential downside of 14.37%. Given Occidental Petroleum’s stronger consensus rating and higher probable upside, analysts clearly believe Occidental Petroleum is more favorable than Ecopetrol.

Dividends

Occidental Petroleum pays an annual dividend of $1.12 per share and has a dividend yield of 1.8%. Ecopetrol pays an annual dividend of $0.65 per share and has a dividend yield of 3.6%. Occidental Petroleum pays out 17.3% of its earnings in the form of a dividend. Ecopetrol 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. Occidental Petroleum has increased its dividend for 5 consecutive years.

Volatility & Risk

Occidental Petroleum has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Profitability

This table compares Occidental Petroleum and Ecopetrol’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Occidental Petroleum	28.36%	15.31%	5.69%
Ecopetrol	11.46%	18.16%	6.76%

Institutional & Insider Ownership

88.7% of Occidental Petroleum shares are held by institutional investors. 0.5% of Occidental Petroleum shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Occidental Petroleum beats Ecopetrol on 12 of the 18 factors compared between the two stocks.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. Its Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; and vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

About Ecopetrol

Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services. As of December 31, 2022, the company had approximately 9,127 kilometers of crude oil and multi-purpose pipelines. It also produces and commercializes polypropylene resins and compounds, and masterbatches; and offers industrial service sales to customers and specialized management services. It has operations in Colombia, the United States, Asia, Central America and the Caribbean, Europe, and South America. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was incorporated in 1948 and is headquartered in Bogotá, Colombia.