Torm (NASDAQ:TRMD) and Ecopetrol (NYSE:EC) Financial Review
by Sarita Garza · The Markets DailyEcopetrol (NYSE:EC – Get Free Report) and Torm (NASDAQ:TRMD – Get Free Report) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.
Analyst Recommendations
This is a summary of current recommendations and price targets for Ecopetrol and Torm, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ecopetrol | 1 | 7 | 0 | 1 | 2.11 |
| Torm | 0 | 1 | 2 | 1 | 3.00 |
Ecopetrol presently has a consensus price target of $15.95, indicating a potential upside of 0.22%. Torm has a consensus price target of $38.00, indicating a potential upside of 0.96%. Given Torm’s stronger consensus rating and higher probable upside, analysts clearly believe Torm is more favorable than Ecopetrol.
Institutional and Insider Ownership
73.9% of Torm shares are held by institutional investors. 0.4% of Torm shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Ecopetrol and Torm’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ecopetrol | 11.46% | 14.50% | 5.42% |
| Torm | 35.51% | 27.24% | 17.96% |
Volatility & Risk
Ecopetrol has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Torm has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500.
Dividends
Ecopetrol pays an annual dividend of $0.65 per share and has a dividend yield of 4.1%. Torm pays an annual dividend of $7.01 per share and has a dividend yield of 18.6%. Ecopetrol pays out 34.4% of its earnings in the form of a dividend. Torm pays out 115.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares Ecopetrol and Torm”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ecopetrol | $29.56 billion | 1.11 | $2.10 billion | $1.89 | 8.42 |
| Torm | $1.34 billion | 2.87 | $285.30 million | $6.07 | 6.20 |
Ecopetrol has higher revenue and earnings than Torm. Torm is trading at a lower price-to-earnings ratio than Ecopetrol, indicating that it is currently the more affordable of the two stocks.
Summary
Torm beats Ecopetrol on 11 of the 16 factors compared between the two stocks.
About Ecopetrol
Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services. As of December 31, 2022, the company had approximately 9,127 kilometers of crude oil and multi-purpose pipelines. It also produces and commercializes polypropylene resins and compounds, and masterbatches; and offers industrial service sales to customers and specialized management services. It has operations in Colombia, the United States, Asia, Central America and the Caribbean, Europe, and South America. 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 incorporated in 1948 and is headquartered in Bogotá, Colombia.
About Torm
TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.