Why It’s Time To Buy Ecopetrol S.A. (ADR) (EC)

These ratios are also superior to its peers as the table below illustrates, with Ecopetrol’s EBITDA margin more than double that of Petrobras, Chevron and Exxon.

Source data: Y Charts, Ecopetrol, Petrobras, Chevron and Exxon Financial Filings

Its return on equity is also superior to Petrobras and Chevron, but marginally lower than Exxon, but its return on assets is also superior to those three peers.

Finally, another compelling reason to invest in Ecopetrol is the company’s superb dividend yield of just over 6%, which is significantly higher than many of its peers and one of the best in its industry, as the table shows.

Source data: Ecopetrol, Petrobras, Chevron and Exxon Investors Relations

Bottom Line

Despite production interruptions, declining profitability and falling margins at the end of 2012, Ecopetrol’s first quarter results indicate that the company is bouncing back. It has delivered a solid EBITDA margin that is one of the best among its peers along with a solid return on equity and return on assets. This along with a solid dividend yield in excess of 6%, makes Ecopetrol a compelling long-term investment opportunity at its current price.

The article Why It’s Time To Buy Ecopetrol originally appeared on Fool.com and is written by Matt Smith.

Matt is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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