Head-To-Head Review: Baytex Energy (NYSE:BTE) and Shell (NYSE:SHEL)
by Michael Walen · The Markets DailyShell (NYSE:SHEL – Get Free Report) and Baytex Energy (NYSE:BTE – Get Free Report) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.
Profitability
This table compares Shell and Baytex Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Shell | 8.55% | 14.34% | 6.74% |
| Baytex Energy | -26.43% | -7.77% | -4.86% |
Volatility and Risk
Shell has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500. Comparatively, Baytex Energy has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.
Dividends
Shell pays an annual dividend of $3.12 per share and has a dividend yield of 3.0%. Baytex Energy pays an annual dividend of $0.06 per share and has a dividend yield of 1.2%. Shell pays out 34.4% of its earnings in the form of a dividend. Baytex Energy pays out -9.0% 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.
Earnings and Valuation
This table compares Shell and Baytex Energy”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Shell | $296.60 billion | 0.98 | $17.84 billion | $9.06 | 11.43 |
| Baytex Energy | $2.56 billion | 1.37 | -$432.12 million | ($0.67) | -7.59 |
Shell has higher revenue and earnings than Baytex Energy. Baytex Energy is trading at a lower price-to-earnings ratio than Shell, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
28.6% of Shell shares are owned by institutional investors. Comparatively, 46.1% of Baytex Energy shares are owned by institutional investors. 1.0% of Shell shares are owned by company insiders. Comparatively, 0.8% of Baytex Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Shell and Baytex Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Shell | 0 | 9 | 7 | 2 | 2.61 |
| Baytex Energy | 0 | 6 | 2 | 3 | 2.73 |
Shell presently has a consensus target price of $106.63, indicating a potential upside of 2.95%. Given Shell’s higher probable upside, equities research analysts plainly believe Shell is more favorable than Baytex Energy.
Summary
Shell beats Baytex Energy on 10 of the 16 factors compared between the two stocks.
About Shell
Shell plc operates as an energy and petrochemical company Europe, Asia, Oceania, Africa, the United States, and Rest of the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. It explores for and extracts crude oil, natural gas, and natural gas liquids; markets and transports oil and gas; produces gas-to-liquids fuels and other products; and operates upstream and midstream infrastructure to deliver gas to market. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, carbon-emission rights; and markets and sells LNG as a fuel for heavy-duty vehicles. In addition, it trades in and refines crude oil and other feed stocks, such as low-carbon fuels, lubricants, bitumen, sulphur, gasoline, diesel, aviation fuel, and marine fuel; produces and sells petrochemicals for industrial use; and manages oil sands activities. Further, the company produces base chemicals comprising ethylene, propylene, and aromatics, as well as intermediate chemicals, such as styrene monomer, propylene oxide, solvents, detergent alcohols, ethylene oxide, and ethylene glycol. Additionally, it generates electricity through wind and solar resources; produces and sells hydrogen; and provides electric vehicle charging services. The company was formerly known as Royal Dutch Shell plc and changed its name to Shell plc in January 2022. Shell plc was founded in 1907 and is headquartered in London, the United Kingdom.
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.