Critical Comparison: Baytex Energy (NYSE:BTE) and Nordic American Tankers (NYSE:NAT)

Nordic American Tankers (NYSE:NAT) and Baytex Energy (NYSE:BTE) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Nordic American Tankers and Baytex Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordic American Tankers	47.04%	20.58%	10.38%
Baytex Energy	-26.43%	-7.77%	-4.86%

Risk & Volatility

Nordic American Tankers has a beta of -0.56, indicating that its stock price is 156% less volatile than the S&P 500. Comparatively, Baytex Energy has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Nordic American Tankers and Baytex Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordic American Tankers	1	2	1	0	2.00
Baytex Energy	0	6	2	3	2.73

Nordic American Tankers currently has a consensus price target of $6.00, indicating a potential downside of 19.19%. Given Nordic American Tankers’ higher probable upside, equities analysts clearly believe Nordic American Tankers is more favorable than Baytex Energy.

Insider & Institutional Ownership

44.3% of Nordic American Tankers shares are held by institutional investors. Comparatively, 46.1% of Baytex Energy shares are held by institutional investors. 2.9% of Nordic American Tankers shares are held by company insiders. Comparatively, 0.8% of Baytex Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Nordic American Tankers and Baytex Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordic American Tankers	$182.54 million	8.61	$12.27 million	$0.59	12.58
Baytex Energy	$2.56 billion	1.45	-$432.12 million	($0.67)	-8.02

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

Dividends

Nordic American Tankers pays an annual dividend of $1.08 per share and has a dividend yield of 14.5%. Baytex Energy pays an annual dividend of $0.06 per share and has a dividend yield of 1.1%. Nordic American Tankers pays out 183.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Baytex Energy pays out -9.0% of its earnings in the form of a dividend. Nordic American Tankers has increased its dividend for 1 consecutive years. Nordic American Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Nordic American Tankers beats Baytex Energy on 11 of the 18 factors compared between the two stocks.

About Nordic American Tankers

Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 20 Suezmax crude oil tankers. The company was incorporated in 1995 and is headquartered in Hamilton, Bermuda.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.