Analyzing Baytex Energy (NYSE:BTE) and Scorpio Tankers (NYSE:STNG)

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

Risk & Volatility

Baytex Energy has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Scorpio Tankers has a beta of -0.22, indicating that its share price is 122% less volatile than the S&P 500.

Earnings & Valuation

This table compares Baytex Energy and Scorpio Tankers”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baytex Energy	$2.56 billion	1.35	-$432.12 million	($0.67)	-7.49
Scorpio Tankers	$1.22 billion	3.50	$344.29 million	$16.01	5.27

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

Analyst Ratings

This is a summary of current ratings and price targets for Baytex Energy and Scorpio Tankers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baytex Energy	1	6	3	1	2.36
Scorpio Tankers	1	5	5	0	2.36

Scorpio Tankers has a consensus target price of $90.14, suggesting a potential upside of 6.85%. Given Scorpio Tankers’ higher possible upside, analysts plainly believe Scorpio Tankers is more favorable than Baytex Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Baytex Energy	-26.43%	-7.77%	-4.86%
Scorpio Tankers	67.16%	16.43%	13.14%

Dividends

Baytex Energy pays an annual dividend of $0.07 per share and has a dividend yield of 1.4%. Scorpio Tankers pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Baytex Energy pays out -10.4% of its earnings in the form of a dividend. Scorpio Tankers pays out 11.2% 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. Scorpio Tankers has raised its dividend for 2 consecutive years. Scorpio Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

46.1% of Baytex Energy shares are owned by institutional investors. Comparatively, 54.6% of Scorpio Tankers shares are owned by institutional investors. 0.8% of Baytex Energy shares are owned by company insiders. Comparatively, 7.3% of Scorpio Tankers shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Scorpio Tankers beats Baytex Energy on 13 of the 17 factors compared between the two stocks.

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.

About Scorpio Tankers

Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of crude oi and refined petroleum products in the shipping markets worldwide. As of March 21, 2024, its fleet consisted of 110 owned and leases financed tanker, including 39 LR2, 57 MR, and 14 Handymax with a weighted average age of approximately 8.1 years. Scorpio Tankers Inc. was incorporated in 2009 and is headquartered in Monaco.