Parsley Energy (NYSE: PE) and Range Resources-Louisiana (NASDAQ:MRD) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Volatility and Risk
Parsley Energy has a beta of -0.09, suggesting that its share price is 109% less volatile than the S&P 500. Comparatively, Range Resources-Louisiana has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500.
This table compares Parsley Energy and Range Resources-Louisiana’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
91.1% of Parsley Energy shares are owned by institutional investors. Comparatively, 85.3% of Range Resources-Louisiana shares are owned by institutional investors. 15.5% of Parsley Energy shares are owned by insiders. Comparatively, 51.1% of Range Resources-Louisiana shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Parsley Energy and Range Resources-Louisiana’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Parsley Energy||$702.95 million||8.89||$501.07 million||$0.11||230.45|
Parsley Energy has higher revenue and earnings than Range Resources-Louisiana. Range Resources-Louisiana is trading at a lower price-to-earnings ratio than Parsley Energy, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Parsley Energy and Range Resources-Louisiana, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Parsley Energy presently has a consensus target price of $40.54, suggesting a potential upside of 59.93%. Given Parsley Energy’s higher probable upside, analysts plainly believe Parsley Energy is more favorable than Range Resources-Louisiana.
Parsley Energy beats Range Resources-Louisiana on 7 of the 10 factors compared between the two stocks.
About Parsley Energy
Parsley Energy, Inc. is a holding company. The Company is an independent oil and natural gas company. The Company focuses on the acquisition, development and exploitation of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and Southeastern New Mexico and includes three primary sub-areas: the Midland Basin, the Central Basin Platform and the Delaware Basin. The Company’s properties are primarily located in the Midland and Delaware Basins, where it focuses on horizontal development drilling and target various stacked pay intervals in the Spraberry, Wolfcamp, Upper Pennsylvanian (Cline) and Atoka shales. As of December 31, 2016, it had an average working interest of 87% in 166 gross (146.7 net) horizontal wells, of which 151 gross (132.4 net) are in the Midland Basin. As of December 31, 2016, the Company operated seven horizontal rigs and three vertical drilling rigs.
About Range Resources-Louisiana
Range Resources-Louisiana, Inc., formerly Memorial Resource Development Corp, is an independent natural gas and oil company focused on the acquisition, exploration and development of natural gas and oil properties with substantially all of its activities in the Terryville Complex of North Louisiana. The Company’s segments include MRD and Memorial Production Partners LP (MEMP). The MRD Segment is focused on the acquisition, exploration, and development of natural gas and oil properties primarily in the Cotton Valley formation in North Louisiana. The MEMP Segment is engaged in the acquisition, exploitation, development and production of oil and natural gas properties, with assets consisting primarily of producing oil and natural gas properties that are located in Texas, Louisiana, Colorado, Wyoming and offshore Southern California. The MEMP segment reflects the combined operations of MEMP and its subsidiaries.
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