Critical Comparison: Cenovus Energy (NYSE:CVE) versus Atlas Energy Solutions (NYSE:AESI)

Cenovus Energy (NYSE:CVE) and Atlas Energy Solutions (NYSE:AESI) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Risk and Volatility

Cenovus Energy has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, Atlas Energy Solutions has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Cenovus Energy and Atlas Energy Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cenovus Energy	8.56%	16.61%	8.73%
Atlas Energy Solutions	13.71%	16.75%	7.61%

Institutional & Insider Ownership

51.2% of Cenovus Energy shares are owned by institutional investors. Comparatively, 34.6% of Atlas Energy Solutions shares are owned by institutional investors. 24.3% of Atlas Energy Solutions shares are owned 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.

Analyst Recommendations

This is a breakdown of current ratings for Cenovus Energy and Atlas Energy Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cenovus Energy	0	0	4	0	3.00
Atlas Energy Solutions	0	0	8	2	3.20

Cenovus Energy presently has a consensus target price of $30.67, indicating a potential upside of 88.89%. Atlas Energy Solutions has a consensus target price of $26.25, indicating a potential upside of 31.84%. Given Cenovus Energy’s higher probable upside, equities research analysts plainly believe Cenovus Energy is more favorable than Atlas Energy Solutions.

Valuation & Earnings

This table compares Cenovus Energy and Atlas Energy Solutions’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cenovus Energy	$59.64 billion	0.51	$3.04 billion	$1.80	9.02
Atlas Energy Solutions	$778.94 million	2.56	$105.43 million	$1.80	11.06

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

Dividends

Cenovus Energy pays an annual dividend of $0.52 per share and has a dividend yield of 3.2%. Atlas Energy Solutions pays an annual dividend of $0.92 per share and has a dividend yield of 4.6%. Cenovus Energy pays out 28.9% of its earnings in the form of a dividend. Atlas Energy Solutions pays out 51.1% 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.

Summary

Atlas Energy Solutions beats Cenovus Energy on 9 of the 16 factors compared between the two stocks.

About Cenovus Energy

Cenovus Energy Inc., together with its subsidiaries, develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products in Canada and internationally. The company operates through Oil Sands, Conventional, Offshore, Canadian Refining, and U.S. Refining segments. The Oil Sands segment develops and produces bitumen and heavy oil in northern Alberta and Saskatchewan. This segment assets include Foster Creek, Christina Lake, and Sunrise projects, as well as Lloydminster thermal and conventional heavy oil assets. The Conventional segment holds natural gas liquids and natural gas assets primarily located in Elmworth-Wapiti, Kaybob-Edson, Clearwater, and Rainbow Lake operating in Alberta and British Columbia, as well as interests in various natural gas processing facilities. The offshore segment engages in offshore operation, exploration, and development activities in China and the East Coast of Canada. The Canadian Refining segment owns and operates Lloydminster upgrading and asphalt refining complex, which converts heavy oil and bitumen into synthetic crude oil, diesel, asphalt, and other ancillary products, as well as Bruderheim crude-by-rail terminal and ethanol plants. The U.S. Refining segment refines crude oil to produce gasoline, diesel, jet fuel, asphalt, and other products. Cenovus Energy Inc. is headquartered in Calgary, Canada.

About Atlas Energy Solutions

Atlas Energy Solutions Inc. engages in the production, processing, and sale of mesh and sand that are used as a proppant during the well completion process in the Permian Basin of Texas and New Mexico. The company provides transportation and logistics, storage solutions, and contract labor services. It sells its products and services to oil and natural gas exploration and production companies, and oilfield services companies. Atlas Energy Solutions Inc. was founded in 2017 and is headquartered in Austin, Texas.