Contrasting Extraction Oil & Gas (NASDAQ:XOG) & TransGlobe Energy (NASDAQ:TGA)

Extraction Oil & Gas (NASDAQ:XOG) and TransGlobe Energy (NASDAQ:TGA) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Dividends

TransGlobe Energy pays an annual dividend of $0.07 per share and has a dividend yield of 5.6%. Extraction Oil & Gas does not pay a dividend. TransGlobe Energy pays out 15.6% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Extraction Oil & Gas and TransGlobe Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Extraction Oil & Gas $1.06 billion 0.27 $114.57 million ($0.10) -21.00
TransGlobe Energy $299.14 million 0.30 $15.68 million $0.45 2.78

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

Profitability

This table compares Extraction Oil & Gas and TransGlobe Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Extraction Oil & Gas 10.89% -3.82% -1.65%
TransGlobe Energy 8.65% 4.01% 2.70%

Analyst Ratings

This is a summary of current recommendations for Extraction Oil & Gas and TransGlobe Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Extraction Oil & Gas 3 7 3 0 2.00
TransGlobe Energy 0 0 0 0 N/A

Extraction Oil & Gas currently has a consensus target price of $6.55, suggesting a potential upside of 211.90%. Given Extraction Oil & Gas’ higher possible upside, research analysts plainly believe Extraction Oil & Gas is more favorable than TransGlobe Energy.

Volatility and Risk

Extraction Oil & Gas has a beta of 1.96, meaning that its stock price is 96% more volatile than the S&P 500. Comparatively, TransGlobe Energy has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Institutional & Insider Ownership

40.6% of TransGlobe Energy shares are owned by institutional investors. 9.2% of Extraction Oil & Gas shares are owned by insiders. Comparatively, 4.0% of TransGlobe Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Extraction Oil & Gas beats TransGlobe Energy on 8 of the 15 factors compared between the two stocks.

About Extraction Oil & Gas

Extraction Oil & Gas, Inc., an independent oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquid reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg (DJ) Basin of Colorado. The company also engages in the construction and support of midstream assets to gather, process, and produce crude oil and gas. As of December 31, 2018, it had approximately 179,300 net acres of contiguous acreage blocks in the productive areas of the DJ Basin; held approximately 138,100 net acres outside of the Core DJ Basin; had estimated proved reserves of approximately 347.9MMBoe; and had 1,538 gross producing wells. The company was founded in 2012 and is headquartered in Denver, Colorado.

About TransGlobe Energy

TransGlobe Energy Corporation, together with its subsidiaries, engages in the exploration, development, and production of crude oil and natural gas in Egypt and Canada. The company holds an interest in five production sharing concessions, including West Gharib, West Bakr, South Alamein, NW Gharib, and South Ghazalat, Egypt; and owns production and working interests in facilities in the Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area of west central Alberta, Canada. TransGlobe Energy Corporation was incorporated in 1968 and is headquartered in Calgary, Canada.

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