Analyzing Matador Resources (NYSE:MTDR) & Legacy Reserves (OTCMKTS:LGCYQ)

Legacy Reserves (OTCMKTS:LGCYQ) and Matador Resources (NYSE:MTDR) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Earnings and Valuation

This table compares Legacy Reserves and Matador Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Legacy Reserves	N/A	N/A	N/A	N/A	N/A
Matador Resources	$3.50 billion	1.85	$885.32 million	$6.26	8.33

Matador Resources has higher revenue and earnings than Legacy Reserves.

Analyst Ratings

This is a summary of current ratings and recommmendations for Legacy Reserves and Matador Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Legacy Reserves	0	0	0	0	0.00
Matador Resources	0	4	10	1	2.80

Matador Resources has a consensus price target of $57.82, suggesting a potential upside of 10.92%. Given Matador Resources’ stronger consensus rating and higher possible upside, analysts plainly believe Matador Resources is more favorable than Legacy Reserves.

Profitability

This table compares Legacy Reserves and Matador Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Legacy Reserves	N/A	N/A	N/A
Matador Resources	20.46%	14.80%	7.48%

Insider and Institutional Ownership

92.0% of Matador Resources shares are held by institutional investors. 0.8% of Legacy Reserves shares are held by insiders. Comparatively, 5.8% of Matador Resources shares are held 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

Matador Resources beats Legacy Reserves on 10 of the 10 factors compared between the two stocks.

About Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.