Critical Analysis: Encana Corporation (ECA) and Its Competitors
Encana Corporation (NYSE: ECA) is one of 245 publicly-traded companies in the “Oil & Gas Exploration and Production” industry, but how does it contrast to its competitors? We will compare Encana Corporation to similar companies based on the strength of its dividends, institutional ownership, analyst recommendations, profitability, earnings, valuation and risk.
Earnings & Valuation
This table compares Encana Corporation and its competitors revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Encana Corporation||$3.77 billion||$1.68 billion||13.33|
|Encana Corporation Competitors||$1.42 billion||$613.42 million||20.48|
Encana Corporation has higher revenue and earnings than its competitors. Encana Corporation is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
This table compares Encana Corporation and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Encana Corporation Competitors||-437.82%||3.75%||1.41%|
Encana Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. Encana Corporation pays out 7.0% of its earnings in the form of a dividend. As a group, “Oil & Gas Exploration and Production” companies pay a dividend yield of 1.9% and pay out 403.3% of their earnings in the form of a dividend.
This is a summary of current ratings and recommmendations for Encana Corporation and its competitors, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Encana Corporation Competitors||1417||7371||11957||253||2.53|
Encana Corporation currently has a consensus price target of $13.50, indicating a potential upside of 17.80%. As a group, “Oil & Gas Exploration and Production” companies have a potential upside of 35.64%. Given Encana Corporation’s competitors higher probable upside, analysts plainly believe Encana Corporation has less favorable growth aspects than its competitors.
Institutional and Insider Ownership
66.8% of Encana Corporation shares are held by institutional investors. Comparatively, 61.2% of shares of all “Oil & Gas Exploration and Production” companies are held by institutional investors. 0.1% of Encana Corporation shares are held by company insiders. Comparatively, 11.8% of shares of all “Oil & Gas Exploration and Production” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Volatility & Risk
Encana Corporation has a beta of 2.12, indicating that its stock price is 112% more volatile than the S&P 500. Comparatively, Encana Corporation’s competitors have a beta of 1.42, indicating that their average stock price is 42% more volatile than the S&P 500.
Encana Corporation beats its competitors on 12 of the 15 factors compared.
About Encana Corporation
Encana Corporation is an energy producer that is focused on developing its multi-basin portfolio of natural gas, oil and natural gas liquids (NGLs) producing plays. The Company’s operations also include the marketing of natural gas, oil and NGLs. All of its reserves and production are located in North America. It operates through three segments: Canadian Operations, USA Operations and Market optimization. Its Canadian Operations segment includes the exploration for, development of, and production of natural gas oil and NGLs and other related activities within Canada. Its Canadian operations include Montney in northeast British Columbia and northwest Alberta and Duvernay in west central Alberta. The USA Operations include the exploration for, development of, and production of natural gas, oil and NGLs, and other related activities within the United States. The Market Optimization activities are primarily responsible for the sale of the Company’s production to third party customers.
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