Financial Contrast: Devon Energy (NYSE:DVN) vs. Ultrapar Participacoes (NYSE:UGP)

Ultrapar Participacoes (NYSE:UGP) and Devon Energy (NYSE:DVN) are both energy companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

Ultrapar Participacoes pays an annual dividend of $0.31 per share and has a dividend yield of 5.5%. Devon Energy pays an annual dividend of $1.28 per share and has a dividend yield of 2.7%. Ultrapar Participacoes pays out 50.8% of its earnings in the form of a dividend. Devon Energy pays out 30.4% 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. Devon Energy has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Ultrapar Participacoes and Devon Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultrapar Participacoes	0	5	3	1	2.56
Devon Energy	0	3	25	2	2.97

Ultrapar Participacoes currently has a consensus price target of $6.54, indicating a potential upside of 16.04%. Devon Energy has a consensus price target of $60.72, indicating a potential upside of 26.19%. Given Devon Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Devon Energy is more favorable than Ultrapar Participacoes.

Volatility and Risk

Ultrapar Participacoes has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Profitability

This table compares Ultrapar Participacoes and Devon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultrapar Participacoes	2.28%	18.84%	7.17%
Devon Energy	16.67%	14.93%	7.91%

Valuation and Earnings

This table compares Ultrapar Participacoes and Devon Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultrapar Participacoes	$153.26 billion	0.04	$439.48 million	$0.61	9.24
Devon Energy	$19.68 billion	2.69	$2.64 billion	$4.21	11.43

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

Institutional & Insider Ownership

3.6% of Ultrapar Participacoes shares are owned by institutional investors. Comparatively, 69.7% of Devon Energy shares are owned by institutional investors. 1.8% of Ultrapar Participacoes shares are owned by company insiders. Comparatively, 4.6% of Devon Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Devon Energy beats Ultrapar Participacoes on 14 of the 18 factors compared between the two stocks.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.

About Devon Energy

Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.