Critical Comparison: Memorial Production Partners (MEMP) vs. Rex Energy (REXX)

Memorial Production Partners (NASDAQ: MEMP) and Rex Energy (NASDAQ:REXX) are both small-cap energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Earnings & Valuation

This table compares Memorial Production Partners and Rex Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Memorial Production Partners N/A N/A N/A ($6.48) -0.02
Rex Energy $139.02 million 0.11 -$176.71 million ($12.49) -0.12

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

Insider & Institutional Ownership

5.5% of Memorial Production Partners shares are held by institutional investors. Comparatively, 12.8% of Rex Energy shares are held by institutional investors. 1.5% of Memorial Production Partners shares are held by insiders. Comparatively, 7.9% of Rex Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Memorial Production Partners and Rex Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Memorial Production Partners -395.31% -496.55% -58.07%
Rex Energy -61.80% -140.84% -3.76%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Memorial Production Partners and Rex Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Memorial Production Partners 0 0 0 0 N/A
Rex Energy 0 5 0 0 2.00

Rex Energy has a consensus price target of $5.34, suggesting a potential upside of 258.52%. Given Rex Energy’s higher probable upside, analysts clearly believe Rex Energy is more favorable than Memorial Production Partners.

Dividends

Memorial Production Partners pays an annual dividend of $0.06 per share and has a dividend yield of 46.2%. Rex Energy does not pay a dividend. Memorial Production Partners pays out -0.9% of its earnings in the form of a dividend.

Summary

Rex Energy beats Memorial Production Partners on 7 of the 10 factors compared between the two stocks.

About Memorial Production Partners

Memorial Production Partners LP (the Partnership) owns, acquires and exploits oil and natural gas properties in North America. The Partnership is owned by its limited partners and general partner. Its general partner is responsible for managing all of the Partnership’s operations and activities. The Partnership operates in the acquisition, exploitation, development and production of oil and natural gas properties segment. Its business activities are conducted through Memorial Production Operating LLC (OLLC) and its wholly owned subsidiaries. Its assets consist primarily of producing oil and natural gas properties, and are located in East Texas/Louisiana, Rockies, Offshore Southern California, Permian Basin and South Texas. Most of its oil and natural gas properties are located in oil and natural gas reservoirs with geologic characteristics and production profiles and capital requirements.

About Rex Energy

Rex Energy Corporation is an independent oil, natural gas liquid (NGL) and natural gas company. The Company has operations in the Appalachian Basin and Illinois Basin. In the Appalachian Basin, the Company is focused on its Marcellus Shale, Utica Shale and Upper Devonian (Burkett) Shale drilling and exploration activities. In the Illinois Basin, the Company is focused on its developmental oil drilling on its properties. The Company owns an interest in approximately 1,820 oil and natural gas wells. The Company produces an average of over 195.8 net millions of cubic feet equivalent (MMcfe) per day, composed of approximately 62.4% natural gas, over 9.5% oil and approximately 28.1% NGLs. In the Illinois Basin, the Company produces an average of approximately 1,998 barrels of oil per day (bopd). Including both developed and undeveloped acreage, the Company controls approximately 99,200 gross (over 79,700 net) acres in Illinois, Indiana and Kentucky.

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