Sanchez Energy (NYSE:SN) vs. Chaparral Energy (NYSE:CHAP) Critical Analysis

Sanchez Energy (NYSE:SN) and Chaparral Energy (NYSE:CHAP) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Risk & Volatility

Sanchez Energy has a beta of 2.46, suggesting that its stock price is 146% more volatile than the S&P 500. Comparatively, Chaparral Energy has a beta of 3.77, suggesting that its stock price is 277% more volatile than the S&P 500.

Institutional & Insider Ownership

39.9% of Sanchez Energy shares are owned by institutional investors. Comparatively, 77.5% of Chaparral Energy shares are owned by institutional investors. 11.1% of Sanchez Energy shares are owned by company insiders. Comparatively, 2.2% of Chaparral Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sanchez Energy and Chaparral Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sanchez Energy 1 6 0 0 1.86
Chaparral Energy 0 0 2 0 3.00

Sanchez Energy presently has a consensus price target of $2.07, indicating a potential upside of 2,852.38%. Chaparral Energy has a consensus price target of $24.00, indicating a potential upside of 471.43%. Given Sanchez Energy’s higher possible upside, research analysts clearly believe Sanchez Energy is more favorable than Chaparral Energy.

Profitability

This table compares Sanchez Energy and Chaparral Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sanchez Energy -9.24% -8.96% 1.59%
Chaparral Energy -24.76% -0.91% -0.56%

Valuation and Earnings

This table compares Sanchez Energy and Chaparral Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sanchez Energy $740.33 million 0.01 $43.19 million ($0.32) -0.22
Chaparral Energy $247.36 million 0.79 $33.44 million $0.31 13.55

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

Summary

Chaparral Energy beats Sanchez Energy on 8 of the 14 factors compared between the two stocks.

About Sanchez Energy

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of U.S. onshore unconventional oil and natural gas resources. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2017, the company had assembled approximately 285,000 net acres in the Eagle Ford Shale; and owned approximately 37,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered in Houston, Texas.

About Chaparral Energy

Chaparral Energy, Inc. engages in the acquisition, exploration, development, production, and operation of onshore oil and natural gas properties primarily in Oklahoma, the United States. The company sells crude oil, natural gas, and natural gas liquids primarily to refineries and gas processing plant. The company was founded in 1988 and is headquartered in Oklahoma City, Oklahoma.

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