Taking everything into account, EC scores 3 out of 10 in our fundamental rating. EC was compared to 207 industry peers in the Oil, Gas & Consumable Fuels industry. EC has a medium profitability rating, but doesn't score so well on its financial health evaluation. EC is valued expensive and it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past 5 years EC has always been profitable.
Each year in the past 5 years EC had a positive operating cash flow.

1.2 Ratios

EC has a Return On Assets of 4.24%. This is comparable to the rest of the industry: EC outperforms 59.42% of its industry peers.
EC has a better Return On Equity (15.76%) than 79.71% of its industry peers.
The Return On Invested Capital of EC (7.79%) is better than 71.98% of its industry peers.
EC had an Average Return On Invested Capital over the past 3 years of 11.97%. This is significantly below the industry average of 21.94%.
The last Return On Invested Capital (7.79%) for EC is well below the 3 year average (11.97%), which needs to be investigated, but indicates that EC had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	4.24%
ROE	15.76%
ROIC	7.79%

ROA(3y)7.54%

ROA(5y)6.13%

ROE(3y)26.29%

ROE(5y)21.07%

ROIC(3y)11.97%

ROIC(5y)9.64%

1.3 Margins

Looking at the Profit Margin, with a value of 9.57%, EC is in line with its industry, outperforming 56.04% of the companies in the same industry.
EC's Profit Margin has declined in the last couple of years.
EC has a better Operating Margin (23.83%) than 62.80% of its industry peers.
In the last couple of years the Operating Margin of EC has declined.
EC's Gross Margin of 31.99% is in line compared to the rest of the industry. EC outperforms 43.48% of its industry peers.
EC's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	23.83%
PM (TTM)	9.57%
GM	31.99%

OM growth 3Y-5.74%

OM growth 5Y-2.03%

PM growth 3Y-14.93%

PM growth 5Y-9.75%

GM growth 3Y-3.76%

GM growth 5Y-0.78%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

EC has about the same amout of shares outstanding than it did 1 year ago.
EC has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for EC is higher compared to a year ago.

2.2 Solvency

The Debt to FCF ratio of EC is 6.99, which is on the high side as it means it would take EC, 6.99 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.99, EC is in line with its industry, outperforming 58.45% of the companies in the same industry.
EC has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
EC has a worse Debt to Equity ratio (1.32) than 72.46% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.32
Debt/FCF	6.99
Altman-Z	N/A

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

EC has a Current Ratio of 1.45. This is a normal value and indicates that EC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of EC (1.45) is better than 64.25% of its industry peers.
EC has a Quick Ratio of 1.20. This is a normal value and indicates that EC is financially healthy and should not expect problems in meeting its short term obligations.
EC has a better Quick ratio (1.20) than 60.87% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.45
Quick Ratio	1.2

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

EC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.48%.
Measured over the past 5 years, EC shows a small growth in Earnings Per Share. The EPS has been growing by 2.42% on average per year.
Looking at the last year, EC shows a decrease in Revenue. The Revenue has decreased by -6.82% in the last year.
The Revenue has been growing by 13.48% on average over the past years. This is quite good.

EPS 1Y (TTM)-25.48%

EPS 3Y-3.65%

EPS 5Y2.42%

EPS Q2Q%-29.72%

Revenue 1Y (TTM)-6.82%

Revenue growth 3Y13.27%

Revenue growth 5Y13.48%

Sales Q2Q%-13.77%

3.2 Future

The Earnings Per Share is expected to decrease by -11.31% on average over the next years. This is quite bad
The Revenue is expected to decrease by -5.41% on average over the next years.

EPS Next Y-8.53%

EPS Next 2Y-10.95%

EPS Next 3Y-11.31%

EPS Next 5YN/A

Revenue Next Year-6%

Revenue Next 2Y-4.6%

Revenue Next 3Y-5.41%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A

4.2 Price Multiples

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	N/A

4.3 Compensation for Growth

EC's earnings are expected to decrease with -11.31% in the coming years. This may justify a cheaper valuation.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-10.95%

EPS Next 3Y-11.31%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 9.22%, EC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.64, EC pays a better dividend. On top of this EC pays more dividend than 91.79% of the companies listed in the same industry.
EC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	9.22%

5.2 History

The dividend of EC has a limited annual growth rate of 2.34%.
EC has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)2.34%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

112.67% of the earnings are spent on dividend by EC. This is not a sustainable payout ratio.
EC's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.

DP112.67%

EPS Next 2Y-10.95%

EPS Next 3Y-11.31%

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ECOPETROL SA-SPONSORED ADR / EC FAQ

What is the ChartMill fundamental rating of ECOPETROL SA-SPONSORED ADR (EC) stock?

ChartMill assigns a fundamental rating of 3 / 10 to EC.

Can you provide the valuation status for ECOPETROL SA-SPONSORED ADR?

ChartMill assigns a valuation rating of 0 / 10 to ECOPETROL SA-SPONSORED ADR (EC). This can be considered as Overvalued.

Can you provide the profitability details for ECOPETROL SA-SPONSORED ADR?

ECOPETROL SA-SPONSORED ADR (EC) has a profitability rating of 5 / 10.

What is the expected EPS growth for ECOPETROL SA-SPONSORED ADR (EC) stock?

The Earnings per Share (EPS) of ECOPETROL SA-SPONSORED ADR (EC) is expected to decline by -8.53% in the next year.

How sustainable is the dividend of ECOPETROL SA-SPONSORED ADR (EC) stock?

The dividend rating of ECOPETROL SA-SPONSORED ADR (EC) is 5 / 10 and the dividend payout ratio is 112.67%.