Head to Head Analysis: Enerplus (NYSE:ERF) vs. Advantage Oil & Gas (AAV)

Advantage Oil & Gas (NYSE: AAV) and Enerplus (NYSE:ERF) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Risk and Volatility

Advantage Oil & Gas has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Enerplus has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Dividends

Enerplus pays an annual dividend of $0.09 per share and has a dividend yield of 1.0%. Advantage Oil & Gas does not pay a dividend. Enerplus pays out 2.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for Advantage Oil & Gas and Enerplus, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advantage Oil & Gas 0 2 1 0 2.33
Enerplus 0 0 5 0 3.00

Advantage Oil & Gas currently has a consensus price target of $10.17, indicating a potential upside of 114.04%. Enerplus has a consensus price target of $15.00, indicating a potential upside of 59.74%. Given Advantage Oil & Gas’ higher probable upside, equities analysts plainly believe Advantage Oil & Gas is more favorable than Enerplus.

Earnings & Valuation

This table compares Advantage Oil & Gas and Enerplus’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advantage Oil & Gas $122.28 million 7.22 -$11.88 million $0.26 18.27
Enerplus $545.68 million 4.17 $300.12 million $3.25 2.89

Enerplus has higher revenue and earnings than Advantage Oil & Gas. Enerplus is trading at a lower price-to-earnings ratio than Advantage Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Advantage Oil & Gas and Enerplus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advantage Oil & Gas 27.06% 3.05% 2.48%
Enerplus 121.44% 14.21% 8.42%

Insider and Institutional Ownership

54.8% of Advantage Oil & Gas shares are held by institutional investors. Comparatively, 49.7% of Enerplus shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Enerplus beats Advantage Oil & Gas on 10 of the 15 factors compared between the two stocks.

About Advantage Oil & Gas

Advantage Oil & Gas Ltd. is an intermediate natural gas and liquids development and production company. The Company is engaged in the business of natural gas exploitation, development, acquisition and production in the Province of Alberta. The Company focuses on the development of Montney resource play at Glacier, Alberta in Western Canada. The Company has drilled over 10 Montney gas wells. The Glacier property lies along the Alberta side of the border with British Columbia between Grande Prairie, Alberta and Dawson Creek, British Columbia. The primary zones of interest are within the Triassic Montney and Doig formation siltstones. The Glacier property consists of over 90 net sections of land with Doig/Montney interests. It owns and operates a gas plant located at 5-02-76-12W6. It also holds interest in approximately 20 additional sections of Doig/Montney land rights in the Glacier, Valhalla and Wembley area proximal to its existing land holdings.

About Enerplus

Enerplus Corporation is an oil and natural gas company. The Company’s oil and natural gas property interests are located in the United States, primarily in North Dakota, Montana, and Pennsylvania, as well as in western Canada in the provinces of Alberta, British Columbia and Saskatchewan. The Company’s oil and natural gas property interests contains proved plus probable gross reserves of approximately 14.3 million barrels (MMbbls) of light and medium crude oil, 39.0 MMbbls of heavy crude oil, 123 MMbbls of tight oil, 18.1 MMbbls of natural gas liquids (NGLs), 126.3 billion cubic feet (Bcf) of conventional natural gas and 1,002.8 Bcf of shale gas, for a total of approximately 382.5 million barrels of oil equivalent (MMBOE). The Company’s primary crude oil properties in the United States are located in the Fort Berthold region of North Dakota and in Richland County, Montana.

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