ECONOMETRIC AND RISK ANALYSIS OF ECOPETROL (EC) STOCK: 2016-2026

 

Ecopetrol is Colombia's leading oil and gas company and one of the most important in Latin America. It is engaged in the exploration, production, transportation, refining, and marketing of hydrocarbons. It is a company with majority ownership by the Colombian state, but its shares are traded on the Colombian and New York stock exchanges.

The information you provided gives a current snapshot, but not the complete performance over the last 10 years. However, we can infer some things and highlight the volatility and sensitivity to oil prices that characterize energy company stocks in the long term.

The 22.5% year-over-year change indicates that the stock price has appreciated significantly by 22.5% in the last year. This is a strong indicator of a short-term upward trend.

The 52-week range, 1,675.0 - 2,265.0, shows the price range between the stock's low and high over the past year, helping investors understand recent volatility.

The indicators you provided demonstrate a company with a strong financial and operational position. Its high market capitalization places it among the largest companies in the region. Its revenue level demonstrates a strong sales generation capacity, indicating high effective profitability of its operations.

For every peso sold, 32.8% remains as gross profit after production costs. This is a healthy margin. The company is generating a 14.3% return on shareholders' invested capital. This is an attractive indicator.

The Price-to-Book (P/B) ratio indicates that the share price is equal to its book value per share. This suggests that the stock may be fairly valued, without being overvalued (as would be the case if it were significantly greater than 1.0x). EBITDA is a very robust indicator of the company's ability to generate cash from its core operations, excluding interest, taxes, depreciation, and amortization.

Investors are attracted to Ecopetrol by a combination of profitability, valuation, and operational stability; the dividend yield of 18.5% on the share price is exceptionally high and far exceeds average market yields. Investors seeking consistent cash flow and high annual returns are strongly motivated. The price-to-earnings ratio (P/E) of 7.2x is relatively low compared to the stock market average, suggesting that the stock may be undervalued relative to its earnings. Value investors see this as an opportunity.

The enterprise value (EV/EBITDA) of 4.2x also suggests an attractive valuation, indicating that the company's price is low relative to the cash flow it generates (EBITDA).

Beta measures the sensitivity of the stock price to market movements. A value of 0.13 is Extremely low. This means that Ecopetrol's stock tends to be much less volatile and risky than the overall market (a beta of 1.0 represents the average market volatility). This attracts investors seeking a stable and defensive investment.

Ecopetrol is viewed by investors as a highly profitable company (high dividends), solidly financed (high revenue/EBITDA), and potentially undervalued (low P/E ratio/EV-EBITDA), all with low exposure to market risk (low beta).

The research data complements the above analysis, offering a key historical perspective on the performance of Ecopetrol's stock (ECO on the BVC).

The long-term variation, viewed over 10 years, suggests a 92.75% appreciation, indicating that, despite ups and downs, the stock has experienced substantial growth in its share price over the last decade.

Over 5 years, there has been a 15.96% depreciation. This contrast indicates that performance has been volatile in the medium term, likely reflecting the impact of large fluctuations in international oil prices (such as the 2020 drop) and changes in Colombia's political and economic landscape.

It is crucial to note that investor returns come not only from the share price but also from dividends. Ecopetrol has maintained a high dividend policy, as historical data shows. The dividend yield was 12.78% in 2024 and 13.33% in 2023, which aligns with the high 18.5% mentioned in the indicators.

The investor in Ecopetrol over 10 years has obtained a positive return due to the share price. However, their total return (price + dividends) is significantly higher, as the company stands out as one of the top dividend payers on the Colombian Stock Exchange.

The analysis you attached is an econometric and statistical evaluation of Ecopetrol (EC) stock, covering the period from January 1, 2016, to January 8, 2026. This type of analysis combines elements of both technical and fundamental analysis, but focuses primarily on quantitative modeling (econometrics) and the statistical description of price behavior.

Technical analysis focuses on the study of price action, patterns, and derived indicators. The price chart shows a price range between 2016 and 2025, with a high around 4500 and a low around 1000/1100. It illustrates a market cycle with a strong initial rise (after the 1105 low) followed by sideways movement or a downward trend towards the end of the period (around 2005).

The dates "START 4/01/2016" and "END 8/01/2026" indicate the time range of the analyzed series.

The line superimposed on the prices corresponds to a trend line that defines a model including linear and polynomial regression (confirmed by the coefficient of determination, which provides a low explanation for the stock's price behavior).

This suggests that the linear trend does not adequately explain the price variance (it is very low, indicating that the price is (more volatile and less predictable by a simple trend line).

The mean (2266.65) and median (2270) are very close, suggesting that the price distribution is relatively symmetrical (although the skewness coefficient slightly contradicts this).

The standard deviation (645.62) is an important measure of volatility. A high value relative to the mean indicates high fluctuation. The range (highest to lowest) shows the magnitude of the stock's swing. The positive skewness (0.17) indicates more upward movements or longer right-tails (higher prices) than would be expected with a normal distribution.

The stock is volatile, with a history of large swings. The price does not follow a clear linear trend over the entire period, and volatility is a key factor to manage.

The fundamental analysis focuses on the company's intrinsic value and provides key risk and return data. The average monthly return is approximately annualized if it remains constant. This is a historical performance data point compared to risk.

The 180-day forecast of 2450 and the 360-day forecast of 2474.43 correspond to projected target prices based on the econometric model (regression). They indicate an expectation of a slight increase from the current average, but should be interpreted with caution as they depend on the accuracy of the model.

The coefficients of determination, as well as the correlation coefficients, are low; for the linear model, this suggests that nonlinear and fundamental factors (news, utilities, policy) may influence the price Dividends, oil prices, etc.) are the main drivers of price, not a simple trend over time. A third-order polynomial model best explains the series, but most of the variation remains unexplained by the time-series model, pointing to the influence of fundamentals.

Ecopetrol's performance is strongly influenced by external and fundamental factors such as oil prices and political/regulatory decisions. Volatility is high, implying significant risk.

The analysis relies heavily on the price probability distribution.

The probability table and graph show the probability density function; the mean and standard deviation are the same values ​​used to center the distribution. The highest probability is centered near the mean/median.

The current price should be evaluated against support and resistance levels within the broad volatility range, as this is its main risk indicator and should be used to set stop-loss and take-profit levels. For the fundamental investor, the analysis should focus on the Brent price, Ecopetrol's quarterly profits, and the company's dividend policy to project future value, since these fundamental factors are what really drive the price (and which the model does not capture).