Critical Contrast: Crescent Point Energy (NYSE:CPG) and Enerplus (NYSE:ERF)

Crescent Point Energy (NYSE:CPG) and Enerplus (NYSE:ERF) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Valuation & Earnings

This table compares Crescent Point Energy and Enerplus’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Crescent Point Energy $3.00 billion 0.69 -$2.02 billion $0.33 11.39
Enerplus $997.46 million 1.50 $291.84 million $1.09 6.16

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

Dividends

Crescent Point Energy pays an annual dividend of $0.03 per share and has a dividend yield of 0.8%. Enerplus pays an annual dividend of $0.09 per share and has a dividend yield of 1.3%. Crescent Point Energy pays out 9.1% of its earnings in the form of a dividend. Enerplus pays out 8.3% 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. Enerplus is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Crescent Point Energy and Enerplus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Crescent Point Energy -73.75% 4.85% 2.54%
Enerplus 32.90% 16.47% 10.43%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Crescent Point Energy and Enerplus, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crescent Point Energy 0 2 5 0 2.71
Enerplus 0 2 5 0 2.71

Crescent Point Energy presently has a consensus price target of $6.61, suggesting a potential upside of 75.85%. Enerplus has a consensus price target of $16.50, suggesting a potential upside of 145.90%. Given Enerplus’ higher possible upside, analysts clearly believe Enerplus is more favorable than Crescent Point Energy.

Insider and Institutional Ownership

35.5% of Crescent Point Energy shares are held by institutional investors. Comparatively, 57.6% of Enerplus shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Crescent Point Energy has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Enerplus has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Summary

Enerplus beats Crescent Point Energy on 11 of the 13 factors compared between the two stocks.

Crescent Point Energy Company Profile

Crescent Point Energy Corp. explores, develops, and produces light and medium crude oil and natural gas reserves in Western Canada and the United States. The company's crude oil and natural gas properties, and related assets are located in the provinces of Saskatchewan, Alberta, British Columbia, and Manitoba; and the states of North Dakota, Montana, and Utah. Crescent Point Energy Corp. is headquartered in Calgary, Canada.

Enerplus Company Profile

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. The company's oil and natural gas properties are located primarily in North Dakota, Montana, Colorado, and Pennsylvania; and Alberta, British Columbia, and Saskatchewan. As of December 31, 2018, it had proved plus probable gross reserves of approximately 12.7 million barrels (MMbbls) of light and medium crude oil; 28.4 MMbbls of heavy crude oil; 167.2 MMbbls of tight oil; 21.1 MMbbls of natural gas liquids; 41.1 billion cubic feet (Bcf) of conventional natural gas; and 1,149.5 Bcf of shale gas. The company was founded in 1986 and is headquartered in Calgary, Canada.

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