RSP Permian (RSPP) and Laredo Petroleum (LPI) Head to Head Survey

RSP Permian (NYSE: RSPP) and Laredo Petroleum (NYSE:LPI) are both mid-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for RSP Permian and Laredo Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RSP Permian 0 0 19 1 3.05
Laredo Petroleum 2 8 8 0 2.33

RSP Permian presently has a consensus price target of $46.30, indicating a potential upside of 10.00%. Laredo Petroleum has a consensus price target of $13.89, indicating a potential upside of 25.50%. Given Laredo Petroleum’s higher probable upside, analysts clearly believe Laredo Petroleum is more favorable than RSP Permian.

Insider & Institutional Ownership

86.2% of RSP Permian shares are owned by institutional investors. 15.0% of RSP Permian shares are owned by insiders. Comparatively, 1.4% of Laredo Petroleum shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares RSP Permian and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RSP Permian 13.69% 2.32% 1.61%
Laredo Petroleum 15.92% 43.77% 6.35%

Valuation and Earnings

This table compares RSP Permian and Laredo Petroleum’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RSP Permian $353.86 million 18.86 -$24.85 million $0.60 70.15
Laredo Petroleum $597.38 million 4.49 -$260.73 million $0.50 22.14

RSP Permian has higher earnings, but lower revenue than Laredo Petroleum. Laredo Petroleum is trading at a lower price-to-earnings ratio than RSP Permian, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

RSP Permian has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Summary

RSP Permian beats Laredo Petroleum on 10 of the 15 factors compared between the two stocks.

RSP Permian Company Profile

RSP Permian, Inc. is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The Company’s properties are located on contiguous acreage blocks in the Midland Basin, and the Delaware Basin, both sub-basins of the Permian Basin. The Midland Basin properties are primarily in the adjacent counties of Midland, Martin, Andrews, Ector, Glasscock and Dawson. The Delaware Basin properties are in Loving and Winkler counties. The Company has drilled Lower Spraberry horizontal well and a Middle Spraberry horizontal well in the Permian Basin. In addition, it has also drilled a Wolfcamp B horizontal well in the North Midland Basin.

Laredo Petroleum Company Profile

Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.

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