Epiroc AB (publ) (OTCMKTS:EPOKY) versus Bonterra Energy (OTCMKTS:BNEFF) Critical Review

Epiroc AB (publ) (OTCMKTS:EPOKY) and Bonterra Energy (OTCMKTS:BNEFF) are both industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Risk and Volatility

Epiroc AB (publ) has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Bonterra Energy has a beta of 2.01, indicating that its stock price is 101% more volatile than the S&P 500.

Insider and Institutional Ownership

0.3% of Bonterra Energy shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Epiroc AB (publ) pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Bonterra Energy pays an annual dividend of $0.09 per share and has a dividend yield of 2.7%. Epiroc AB (publ) pays out 27.8% of its earnings in the form of a dividend. Bonterra Energy pays out 12.0% 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. Bonterra Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Epiroc AB (publ) and Bonterra Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epiroc AB (publ)	1	2	0	0	1.67
Bonterra Energy	0	0	0	0	N/A

Profitability

This table compares Epiroc AB (publ) and Bonterra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epiroc AB (publ)	13.96%	22.19%	11.81%
Bonterra Energy	12.63%	7.36%	3.93%

Earnings & Valuation

This table compares Epiroc AB (publ) and Bonterra Energy’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epiroc AB (publ)	$5.69 billion	4.03	$889.34 million	$0.72	26.25
Bonterra Energy	$236.68 million	0.52	$33.29 million	$0.75	4.40

Epiroc AB (publ) has higher revenue and earnings than Bonterra Energy. Bonterra Energy is trading at a lower price-to-earnings ratio than Epiroc AB (publ), indicating that it is currently the more affordable of the two stocks.

Summary

Epiroc AB (publ) beats Bonterra Energy on 7 of the 12 factors compared between the two stocks.

About Epiroc AB (publ)

Epiroc AB (publ), together with its subsidiaries, develops and produces equipment for use in surface and underground applications in North America, Europe, South America, Europe, Africa, the Middle East, Asia, and Australia. It operates in two segments, Equipment & Service, and Tools & Attachments. The Equipment & Service segment provides equipment and solutions for rock drilling, rock excavation, rock reinforcement, loading and haulage, and ventilation systems, as well as drilling equipment for exploration, and water and energy; and related spare parts and services for the mining and infrastructure industries. This segment offers solutions for automation, digitalization, and electrification. The Tools & Attachments segment provides consumables for rock drilling, such as drill bits and drill rods, as well as tools for exploration drilling and rock reinforcement; ground engaging tools, such as cast lips, teeth, and protective shrouds, as well as digital solutions for the mining industry; and hydraulic attachments, including hydraulic breakers, shears and pulverizers, concrete cutters and busters, drum cutters, excavator grapples, excavator magnets, hydraulic compactors, crusher and screening buckets, auger drive units, and couplers and thumbs, as well as HATCON that is a remote monitoring tool. In addition, the company offers aftermarket services, including new circular services, productivity-enhancing technology-agnostic digital solutions, mid-life upgrades, diesel-to-battery conversions, and remanufacturing of components. Epiroc AB (publ) was founded in 1873 and is headquartered in Nacka, Sweden.

About Bonterra Energy

Bonterra Energy Corp., a conventional oil and gas company, engages in the development and production of oil and natural gas in Canada. Its principal properties include Pembina Cardium, a conventional oil field, at the Pembina and Willesden green fields located in central Alberta; and holds 100% interest in the Montney properties that consist of approximately 28,880 acres located in the north of Grand Prairie, Alberta. The company was incorporated in 2013 and is headquartered in Calgary, Canada.