PDC Energy (PDCE) versus Ecopetrol (EC) Critical Review

PDC Energy (NASDAQ:PDCE) and Ecopetrol (NYSE:EC) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Risk & Volatility

PDC Energy has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Dividends

Ecopetrol pays an annual dividend of $1.04 per share and has a dividend yield of 5.7%. PDC Energy does not pay a dividend. Ecopetrol pays out 59.8% of its earnings in the form of a dividend.

Profitability

This table compares PDC Energy and Ecopetrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PDC Energy -7.38% -2.50% -1.32%
Ecopetrol 16.70% 10.61% 4.73%

Valuation and Earnings

This table compares PDC Energy and Ecopetrol’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PDC Energy $1.55 billion 1.66 $2.02 million ($2.96) -13.10
Ecopetrol $21.61 billion N/A $18.21 billion $1.74 10.40

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for PDC Energy and Ecopetrol, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PDC Energy 1 6 16 0 2.65
Ecopetrol 0 6 0 0 2.00

PDC Energy presently has a consensus price target of $62.00, suggesting a potential upside of 59.84%. Ecopetrol has a consensus price target of $20.50, suggesting a potential upside of 13.26%. Given PDC Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe PDC Energy is more favorable than Ecopetrol.

Summary

Ecopetrol beats PDC Energy on 9 of the 13 factors compared between the two stocks.

PDC Energy Company Profile

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. Its operations are primarily located in the Wattenberg Field in Colorado and the Delaware Basin in Texas. The company was formerly known as Petroleum Development Corporation and changed its name to PDC Energy, Inc. in June 2012. PDC Energy, Inc. was founded in 1969 and is headquartered in Denver, Colorado.

Ecopetrol Company Profile

Ecopetrol S.A. operates as an integrated oil and gas company. The company operates through three segments: Exploration and Production; Transport and Logistics; and Refining, Petrochemical, and Biofuels. It produces crude oil and gas; and engages in the extraction, collection, treatment, storage, commercialization, and pumping. The company has 9,071 kilometers of transportation pipeline systems. It also transports and distributes hydrocarbons, derivatives, and products. In addition, the company produces and markets polypropylene resin, compounds, and masterbatches; and offers refined and petrochemical products, as well as industrial service sales to customers. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was founded in 1948 and is based in Bogotá, Colombia.

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