Independence Contract Drilling (NYSE:ICD) and Baytex Energy (NYSE:BTE) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Risk and Volatility

Independence Contract Drilling has a beta of 2.65, meaning that its share price is 165% more volatile than the S&P 500. Comparatively, Baytex Energy has a beta of 3.09, meaning that its share price is 209% more volatile than the S&P 500.

Profitability

This table compares Independence Contract Drilling and Baytex Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independence Contract Drilling -19.21% -7.34% -5.63%
Baytex Energy -0.55% -8.23% -3.55%

Earnings & Valuation

This table compares Independence Contract Drilling and Baytex Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independence Contract Drilling $90.01 million 2.06 -$24.29 million ($0.53) -9.19
Baytex Energy $1.42 billion 1.12 $67.24 million ($0.02) -143.50

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Independence Contract Drilling and Baytex Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independence Contract Drilling 0 1 4 0 2.80
Baytex Energy 1 1 9 0 2.73

Independence Contract Drilling currently has a consensus target price of $6.38, suggesting a potential upside of 30.90%. Baytex Energy has a consensus target price of $5.00, suggesting a potential upside of 74.22%. Given Baytex Energy’s higher probable upside, analysts plainly believe Baytex Energy is more favorable than Independence Contract Drilling.

Institutional & Insider Ownership

75.8% of Independence Contract Drilling shares are held by institutional investors. Comparatively, 29.7% of Baytex Energy shares are held by institutional investors. 11.8% of Independence Contract Drilling shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Baytex Energy beats Independence Contract Drilling on 8 of the 14 factors compared between the two stocks.

About Independence Contract Drilling

Independence Contract Drilling, Inc. provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns, and operates a fleet of pad-optimal ShaleDriller rigs that are engineered and designed to optimize the development of various oil and natural gas properties in the Permian Basin. Its fleet consists of 14 rigs. The company was founded in 2011 and is headquartered in Houston, Texas.

About Baytex Energy

Baytex Energy Corp., an oil and gas company, engages in the acquisition, development, and production of oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. It offers heavy oil, heavy gravity crude oil, bitumen, light oil, and natural gas liquids. Its primary oil resource plays include the Eagle Ford in Texas, and the Peace River Oil Sands and Lloydminster heavy oil projects in North America. The company provides 612 million barrels of oil equivalent; bitumen in low estimate to 1,181 million barrels of oil equivalent; and bitumen in the high estimate to 798 million barrels of oil equivalent. Baytex Energy Corp. was founded in 1993 and is headquartered in Calgary, Canada.

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