Cimarex Energy (NYSE: XEC) and Approach Resources (NASDAQ:AREX) are both energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.
This is a breakdown of recent ratings and price targets for Cimarex Energy and Approach Resources, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cimarex Energy pays an annual dividend of $0.32 per share and has a dividend yield of 0.3%. Approach Resources does not pay a dividend. Cimarex Energy pays out 6.2% of its earnings in the form of a dividend.
This table compares Cimarex Energy and Approach Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Cimarex Energy and Approach Resources’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cimarex Energy||$1.92 billion||4.90||$494.32 million||$5.19||19.02|
|Approach Resources||$90.30 million||2.89||-$52.24 million||($2.52)||-1.20|
Cimarex Energy has higher revenue and earnings than Approach Resources. Approach Resources is trading at a lower price-to-earnings ratio than Cimarex Energy, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
91.7% of Cimarex Energy shares are owned by institutional investors. Comparatively, 23.4% of Approach Resources shares are owned by institutional investors. 1.7% of Cimarex Energy shares are owned by insiders. Comparatively, 5.1% of Approach Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
Cimarex Energy has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Approach Resources has a beta of 2.71, meaning that its stock price is 171% more volatile than the S&P 500.
Cimarex Energy beats Approach Resources on 13 of the 16 factors compared between the two stocks.
Cimarex Energy Company Profile
Cimarex Energy Co. is an independent oil and gas exploration and production company. The Company operates in exploration and production (E&P) segment. Its operations are located in Oklahoma, Texas and New Mexico. Its E&P activities take place primarily in two areas: the Permian Basin and the Mid-Continent region. Its Permian Basin region encompasses west Texas and southeast New Mexico. Its Mid-Continent region consists of Oklahoma and the Texas Panhandle. As of fiscal year ended December 31, 2016 (fiscal 2016), its activities in the Mid-Continent were focused in the Woodford shale and the Meramec horizon, both in Oklahoma. During fiscal 2016, production from the Mid-Continent averaged 457 millions of cubic feet equivalent (MMcfe) per day, or 47% of total company production. All of the Company’s oil and gas assets are located in the United States. As of December 31, 2016, 63% of its total proved reserves were located in the Mid-Continent region and 37% were in the Permian Basin.
Approach Resources Company Profile
Approach Resources Inc. is an independent energy company. The Company is focused on the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater Permian Basin in West Texas. The Company’s business segment is the exploration and production of oil, natural gas liquids (NGLs) and natural gas. The Company’s assets cover an area of approximately 126,000 net acres. Its proved reserves are approximately 166.6 million barrels of oil equivalent. The Company’s proved reserves are primarily located in Crockett and Schleicher Counties, Texas. The Company’s Permian Basin acreage is known as the Project Pangea. The Company owns and operates approximately 800 producing oil and gas wells in the Permian Basin. The Company, through a joint venture with EnCana Oil & Gas (USA) Inc., holds interests in the approximately 3,000 gross acre project in Limestone and Robertson Counties, Texas, in the East Texas Cotton Valley trend.
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