Reviewing Vaalco Energy (NYSE:EGY) and Riley Exploration Permian (NYSE:REPX)

Riley Exploration Permian (NYSE:REPX) and Vaalco Energy (NYSE:EGY) are both small-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Risk and Volatility

Riley Exploration Permian has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Vaalco Energy has a beta of 0.14, indicating that its share price is 86% less volatile than the S&P 500.

Dividends

Riley Exploration Permian pays an annual dividend of $1.60 per share and has a dividend yield of 3.9%. Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.1%. Riley Exploration Permian pays out 29.0% of its earnings in the form of a dividend. Vaalco Energy pays out -23.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Riley Exploration Permian has raised its dividend for 3 consecutive years. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Riley Exploration Permian and Vaalco Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Riley Exploration Permian	$483.86 million	1.88	$111.59 million	$5.52	7.46
Vaalco Energy	$419.87 million	1.52	-$41.39 million	($1.06)	-5.73

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

Profitability

This table compares Riley Exploration Permian and Vaalco Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Riley Exploration Permian	28.48%	23.82%	11.31%
Vaalco Energy	-31.11%	-14.36%	-6.41%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Riley Exploration Permian and Vaalco Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Riley Exploration Permian	0	1	3	0	2.75
Vaalco Energy	1	1	0	0	1.50

Riley Exploration Permian presently has a consensus target price of $43.00, suggesting a potential upside of 4.45%. Vaalco Energy has a consensus target price of $7.30, suggesting a potential upside of 20.18%. Given Vaalco Energy’s higher probable upside, analysts plainly believe Vaalco Energy is more favorable than Riley Exploration Permian.

Insider and Institutional Ownership

58.9% of Riley Exploration Permian shares are held by institutional investors. Comparatively, 50.3% of Vaalco Energy shares are held by institutional investors. 4.2% of Riley Exploration Permian shares are held by insiders. Comparatively, 3.0% of Vaalco Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Riley Exploration Permian beats Vaalco Energy on 14 of the 17 factors compared between the two stocks.

About Riley Exploration Permian

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the Northwest Shelf and Yeso trend of the Permian Basin. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Eddy County, New Mexico. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.

About Vaalco Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.