Critical Review: Equinor ASA (EQNR) & Vertex Energy (VTNR)

Equinor ASA (NYSE: EQNR) and Vertex Energy (NASDAQ:VTNR) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

Equinor ASA has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Vertex Energy has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Earnings and Valuation

This table compares Equinor ASA and Vertex Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equinor ASA $61.19 billion 1.42 $4.59 billion $1.38 18.96
Vertex Energy $145.50 million 0.27 -$8.43 million ($0.36) -3.25

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

Dividends

Equinor ASA pays an annual dividend of $0.67 per share and has a dividend yield of 2.6%. Vertex Energy does not pay a dividend. Equinor ASA pays out 48.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Equinor ASA and Vertex Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equinor ASA 0 3 1 0 2.25
Vertex Energy 0 1 0 0 2.00

Vertex Energy has a consensus price target of $1.00, indicating a potential downside of 14.53%. Given Vertex Energy’s higher probable upside, analysts clearly believe Vertex Energy is more favorable than Equinor ASA.

Profitability

This table compares Equinor ASA and Vertex Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equinor ASA 6.69% 13.09% 4.68%
Vertex Energy -4.93% -22.70% -7.92%

Insider and Institutional Ownership

4.9% of Equinor ASA shares are owned by institutional investors. Comparatively, 13.4% of Vertex Energy shares are owned by institutional investors. 29.2% of Vertex Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Equinor ASA beats Vertex Energy on 12 of the 16 factors compared between the two stocks.

About Equinor ASA

Equinor ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development & Production Norway; Development & Production USA; Development & Production International; Marketing, Midstream & Processing; New Energy Solutions; Technology, Projects & Drilling; Exploration; and Global Strategy & Business Development segments. It also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; markets and trades in electricity and emission rights; and operates refineries, processing and power plants, and terminals. In addition, the company develops wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. As of December 31, 2017, it had proved oil and gas reserves of 5,367 million barrels of oil equivalent. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was founded in 1972 and is headquartered in Stavanger, Norway.

About Vertex Energy

Vertex Energy, Inc., an environmental services company, provides a range of services designed to aggregate, process, and recycle industrial and commercial waste systems in 15 states, primarily in the Gulf Coast, Midwest, and Mid-Atlantic regions of the United States. The company operates in three divisions: Black Oil, Refining and Marketing, and Recovery. The Black Oil division collects and purchases used motor oil directly from third-party generators; aggregates used motor oil from a network of local and regional collectors; and sells used motor oil to customers for use as a feedstock or replacement fuel for industrial burners. This division also produces and sells a vacuum gas oil product to refineries and marine fuels market; and base oil product to lubricant packagers and distributors. The Refining and Marketing division gathers hydrocarbon streams in the form of petroleum distillates, transmix, and other chemical products that are purchased from pipeline operators, refineries, chemical processing facilities, and third-party providers; and sells end products, such as gasoline blendstock, pygas, and fuel oil cutter stock to oil companies or to petroleum trading and blending companies. The Recovery division generates solutions for the recovery and management of hydrocarbon streams; and provides dismantling, demolition, decommission, and marine salvage services, as well as owns and operates a fleet of trucks and other vehicles used for shipping and handling equipment and scrap materials. Vertex Energy, Inc. is headquartered in Houston, Texas.

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