Head-To-Head Review: Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) and Comstock Resources (NYSE:CRK)

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) and Comstock Resources (NYSE:CRK) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

36.1% of Comstock Resources shares are held by institutional investors. 1.5% of Comstock Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Petróleo Brasileiro S.A. – Petrobras and Comstock Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petróleo Brasileiro S.A. – Petrobras	$99.89 billion	0.95	$24.88 billion	$3.44	4.25
Comstock Resources	$1.37 billion	2.36	$211.12 million	$0.22	50.32

Petróleo Brasileiro S.A. – Petrobras has higher revenue and earnings than Comstock Resources. Petróleo Brasileiro S.A. – Petrobras is trading at a lower price-to-earnings ratio than Comstock Resources, indicating that it is currently the more affordable of the two stocks.

Dividends

Petróleo Brasileiro S.A. – Petrobras pays an annual dividend of $0.86 per share and has a dividend yield of 5.9%. Comstock Resources pays an annual dividend of $0.50 per share and has a dividend yield of 4.5%. Petróleo Brasileiro S.A. – Petrobras pays out 25.0% of its earnings in the form of a dividend. Comstock Resources pays out 227.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Petróleo Brasileiro S.A. – Petrobras is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings for Petróleo Brasileiro S.A. – Petrobras and Comstock Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petróleo Brasileiro S.A. – Petrobras	0	1	6	0	2.86
Comstock Resources	3	7	1	0	1.82

Petróleo Brasileiro S.A. – Petrobras currently has a consensus target price of $18.20, suggesting a potential upside of 24.49%. Comstock Resources has a consensus target price of $9.75, suggesting a potential downside of 12.40%. Given Petróleo Brasileiro S.A. – Petrobras’ stronger consensus rating and higher probable upside, equities analysts clearly believe Petróleo Brasileiro S.A. – Petrobras is more favorable than Comstock Resources.

Profitability

This table compares Petróleo Brasileiro S.A. – Petrobras and Comstock Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petróleo Brasileiro S.A. – Petrobras	16.17%	28.42%	10.53%
Comstock Resources	-1.48%	-1.38%	-0.53%

Volatility and Risk

Petróleo Brasileiro S.A. – Petrobras has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Comstock Resources has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Summary

Petróleo Brasileiro S.A. – Petrobras beats Comstock Resources on 12 of the 16 factors compared between the two stocks.

About Petróleo Brasileiro S.A. – Petrobras

Petróleo Brasileiro S.A. – Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. It also engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields, and shale or other rocks, as well as oil products, natural gas, and other liquid hydrocarbons. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries. The Refining, Transportation and Marketing segment engages in the refining, logistics, transport, marketing, and trading of crude oil and oil products; exportation of ethanol; and extraction and processing of shale, as well as holding interests in petrochemical companies. The Gas and Power segment is involved in the logistic and trading of natural gas and electricity; transportation and trading of LNG; generation of electricity through thermoelectric power plants; holding interests in transportation and distribution of natural gas; and fertilizer production and natural gas processing business. In addition, the company produces biodiesel and its co-products, and ethanol; and distributes oil products. Further, it engages in research, development, production, transport, distribution, and trading of energy. Petróleo Brasileiro S.A. – Petrobras was incorporated in 1953 and is headquartered in Rio de Janeiro, Brazil.

About Comstock Resources

Comstock Resources, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. Its assets are located in the Haynesville and Bossier shales located in North Louisiana and East Texas. The company was incorporated in 1919 and is headquartered in Frisco, Texas. Comstock Resources, Inc. is a subsidiary of Arkoma Drilling, L.P.