Contrasting Galp Energia SGPS (OTCMKTS:GLPEY) and Murphy Oil (NYSE:MUR)

Galp Energia SGPS (OTCMKTS:GLPEY) and Murphy Oil (NYSE:MUR) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Volatility & Risk

Galp Energia SGPS has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500. Comparatively, Murphy Oil has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Galp Energia SGPS and Murphy Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Galp Energia SGPS	4.55%	28.78%	9.53%
Murphy Oil	9.74%	6.63%	3.51%

Valuation and Earnings

This table compares Galp Energia SGPS and Murphy Oil”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Galp Energia SGPS	$22.89 billion	0.66	$1.27 billion	$0.81	13.83
Murphy Oil	$2.72 billion	2.08	$104.23 million	$2.02	19.53

Galp Energia SGPS has higher revenue and earnings than Murphy Oil. Galp Energia SGPS is trading at a lower price-to-earnings ratio than Murphy Oil, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

78.3% of Murphy Oil shares are held by institutional investors. 5.8% of Murphy Oil shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Galp Energia SGPS pays an annual dividend of $0.18 per share and has a dividend yield of 1.6%. Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. Galp Energia SGPS pays out 22.2% of its earnings in the form of a dividend. Murphy Oil pays out 69.3% 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. Murphy Oil has raised its dividend for 5 consecutive years. Murphy Oil is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Galp Energia SGPS and Murphy Oil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Galp Energia SGPS	0	5	3	1	2.56
Murphy Oil	2	8	4	1	2.27

Murphy Oil has a consensus price target of $39.75, suggesting a potential upside of 0.77%. Given Murphy Oil’s higher probable upside, analysts plainly believe Murphy Oil is more favorable than Galp Energia SGPS.

Summary

Murphy Oil beats Galp Energia SGPS on 11 of the 17 factors compared between the two stocks.

About Galp Energia SGPS

Galp Energia, SGPS, S.A. operates as an integrated energy operator in Portugal and internationally. The company operates through four segments: Upstream, Industrial & Midstream, Commercial, and Renewables and New Business. The Upstream segment engages in the exploration, development, and production of hydrocarbons primarily in Brazil, Mozambique, Namibia, and Angola. The Industrial & Midstream segment owns refineries in Portugal, as well as is involved in activities related to energy management of oil products, gas, and electricity. This segment provides storage and transportation infrastructure for oil and gas products, as well as engages in the sale of electricity to the grid in Portugal and Spain. The Commercial segment is involved in the areas of retail to final business-to-business and business to consumer customers of oil, gas, and electricity. The Renewables and New Business segment is involved in the development of solar and wind power generation projects in Portugal and Spain. In addition, it produces lithium-ion batteries, hydrogen, and biofuels; and operates service stations. Further, the company engages in the reinsurance business. The company was formerly known as Galp Petróleos e Gás de Portugal, SGPS, S.A. and changed its name to Galp Energia, SGPS, S.A. in September 2000. Galp Energia, SGPS, S.A. was incorporated in 1999 and is headquartered in Lisbon, Portugal.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.