Apache (NYSE: APA) and EP Energy (NYSE:EPE) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Institutional & Insider Ownership

94.7% of Apache shares are owned by institutional investors. Comparatively, 68.9% of EP Energy shares are owned by institutional investors. 0.5% of Apache shares are owned by insiders. Comparatively, 1.3% of EP Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Apache has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, EP Energy has a beta of 4.44, meaning that its stock price is 344% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Apache and EP Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apache 7 9 2 0 1.72
EP Energy 7 5 1 0 1.54

Apache currently has a consensus price target of $45.44, suggesting a potential upside of 1.67%. EP Energy has a consensus price target of $3.60, suggesting a potential upside of 87.50%. Given EP Energy’s higher probable upside, analysts clearly believe EP Energy is more favorable than Apache.

Profitability

This table compares Apache and EP Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apache 10.60% -0.70% -0.25%
EP Energy -25.44% -8.50% -0.97%

Earnings and Valuation

This table compares Apache and EP Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apache $5.35 billion 3.18 -$1.41 billion $1.73 25.83
EP Energy $767.00 million 0.64 -$27.00 million ($1.07) -1.79

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

Dividends

Apache pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. EP Energy does not pay a dividend. Apache pays out 57.8% of its earnings in the form of a dividend.

Summary

Apache beats EP Energy on 11 of the 16 factors compared between the two stocks.

About Apache

Apache Corporation is an independent energy company. The Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. The Company’s production segments include: the United States, Egypt and the United Kingdom North Sea. It also pursues exploration interests in Suriname. In North America, the Company has three onshore regions: The Permian region, The Midcontinent/Gulf Coast region. The Permian region located in West Texas and New Mexico includes the Permian sub-basins, the Midland Basin, Central Basin Platform/Northwest Shelf and Delaware Basin. The Midcontinent/Gulf Coast region includes the Granite Wash, Tonkawa, Canyon Lime, Marmaton, and Cleveland formations of the West Anadarko Basin, the Woodford-SCOOP and Stack plays located in Central Oklahoma, and the Eagle Ford shale in South East Texas.

About EP Energy

EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).

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