Critical Analysis: Cenovus Energy (NYSE:CVE) and Permianville Royalty Trust (NYSE:PVL)

Cenovus Energy (NYSE:CVE) and Permianville Royalty Trust (NYSE:PVL) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Cenovus Energy and Permianville Royalty Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cenovus Energy	$38.67 billion	1.01	$3.04 billion	$1.58	13.20
Permianville Royalty Trust	$10.35 million	4.69	$10.60 million	$0.43	3.42

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

Dividends

Cenovus Energy pays an annual dividend of $0.41 per share and has a dividend yield of 2.0%. Permianville Royalty Trust pays an annual dividend of $0.07 per share and has a dividend yield of 4.8%. Cenovus Energy pays out 25.9% of its earnings in the form of a dividend. Permianville Royalty Trust pays out 16.3% 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. Cenovus Energy has raised its dividend for 1 consecutive years. Permianville Royalty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

51.2% of Cenovus Energy shares are held by institutional investors. Comparatively, 6.8% of Permianville Royalty Trust shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Cenovus Energy and Permianville Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cenovus Energy	7.88%	14.85%	7.61%
Permianville Royalty Trust	31.22%	24.89%	24.89%

Analyst Ratings

This is a summary of recent recommendations and price targets for Cenovus Energy and Permianville Royalty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cenovus Energy	0	0	5	0	3.00
Permianville Royalty Trust	0	0	0	0	N/A

Cenovus Energy presently has a consensus target price of $26.67, suggesting a potential upside of 27.90%. Given Cenovus Energy’s higher possible upside, research analysts clearly believe Cenovus Energy is more favorable than Permianville Royalty Trust.

Risk & Volatility

Cenovus Energy has a beta of 2.15, meaning that its share price is 115% more volatile than the S&P 500. Comparatively, Permianville Royalty Trust has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

Cenovus Energy beats Permianville Royalty Trust on 9 of the 15 factors compared between the two stocks.

About Cenovus Energy

Cenovus Energy Inc., together with its subsidiaries, develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products in Canada and internationally. The company operates through Oil Sands, Conventional, Offshore, Canadian Refining, and U.S. Refining segments. The Oil Sands segment develops and produces bitumen and heavy oil in northern Alberta and Saskatchewan. This segment assets include Foster Creek, Christina Lake, and Sunrise projects, as well as Lloydminster thermal and conventional heavy oil assets. The Conventional segment holds natural gas liquids and natural gas assets primarily located in Elmworth-Wapiti, Kaybob-Edson, Clearwater, and Rainbow Lake operating in Alberta and British Columbia, as well as interests in various natural gas processing facilities. The offshore segment engages in offshore operation, exploration, and development activities in China and the East Coast of Canada. The Canadian Refining segment owns and operates Lloydminster upgrading and asphalt refining complex, which converts heavy oil and bitumen into synthetic crude oil, diesel, asphalt, and other ancillary products, as well as Bruderheim crude-by-rail terminal and ethanol plants. The U.S. Refining segment refines crude oil to produce gasoline, diesel, jet fuel, asphalt, and other products. Cenovus Energy Inc. is headquartered in Calgary, Canada.

About Permianville Royalty Trust

Permianville Royalty Trust operates as a statutory trust. It is involved in the acquisition and holding of net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in the states of Texas, Louisiana, and New Mexico. The company was formerly known as Enduro Royalty Trust and changed its name to Permianville Royalty Trust in September 2018. Permianville Royalty Trust was incorporated in 2011 and is based in Houston, Texas.