Reviewing Petroquest Energy (PQ) & Apache (APA)

Petroquest Energy (NYSE: PQ) and Apache (NYSE:APA) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Insider and Institutional Ownership

38.0% of Petroquest Energy shares are owned by institutional investors. Comparatively, 94.6% of Apache shares are owned by institutional investors. 10.4% of Petroquest Energy shares are owned by insiders. Comparatively, 0.5% of Apache shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Apache pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Petroquest Energy does not pay a dividend. Apache pays out 57.5% of its earnings in the form of a dividend. Apache has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Petroquest Energy and Apache, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Petroquest Energy 0 2 1 0 2.33
Apache 7 9 2 0 1.72

Petroquest Energy currently has a consensus target price of $3.50, indicating a potential upside of 116.05%. Apache has a consensus target price of $45.69, indicating a potential upside of 13.51%. Given Petroquest Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Petroquest Energy is more favorable than Apache.

Profitability

This table compares Petroquest Energy and Apache’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Petroquest Energy -17.75% N/A -10.55%
Apache 10.60% -0.70% -0.25%

Risk & Volatility

Petroquest Energy has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Apache has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares Petroquest Energy and Apache’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Petroquest Energy $66.67 million 0.52 -$90.89 million ($1.00) -1.62
Apache $5.35 billion 2.86 -$1.41 billion $1.74 23.13

Petroquest Energy has higher earnings, but lower revenue than Apache. Petroquest Energy is trading at a lower price-to-earnings ratio than Apache, indicating that it is currently the more affordable of the two stocks.

Summary

Apache beats Petroquest Energy on 9 of the 16 factors compared between the two stocks.

Petroquest Energy Company Profile

PetroQuest Energy, Inc. is an oil and gas company. The Company is engaged in exploratory, development and acquisition activities. The Company has approximately 30 gross exploratory wells and over 30 gross development wells. The Company has reserves in various areas, including East Texas, Gulf Coast Basin and Oklahoma Woodford. Its annual production from East Texas area is approximately 114.1 billions of cubic feet equivalent (Bcfe); Gulf Coast Basin is over 43.9 Bcfe, and Oklahoma Woodford is approximately 20.0 Bcfe. The net production from its East Texas assets averages over 30.4 millions of cubic feet equivalent (MMcfe) per day. Production from Gulf Coast Basin area totals approximately 37.8 MMcfe per day. The average daily production from its Oklahoma-Woodford properties totals over 25 MMcfe per day. The Company sells its oil and natural gas production under fixed or floating market contracts.

Apache Company Profile

Apache Corporation is an independent energy company. The Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. The Company’s production segments include: the United States, Egypt and the United Kingdom North Sea. It also pursues exploration interests in Suriname. In North America, the Company has three onshore regions: The Permian region, The Midcontinent/Gulf Coast region. The Permian region located in West Texas and New Mexico includes the Permian sub-basins, the Midland Basin, Central Basin Platform/Northwest Shelf and Delaware Basin. The Midcontinent/Gulf Coast region includes the Granite Wash, Tonkawa, Canyon Lime, Marmaton, and Cleveland formations of the West Anadarko Basin, the Woodford-SCOOP and Stack plays located in Central Oklahoma, and the Eagle Ford shale in South East Texas.

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