Centennial Resource Development (NASDAQ:CDEV) and Sanchez Energy (NYSE:SN) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Institutional & Insider Ownership

99.5% of Centennial Resource Development shares are owned by institutional investors. Comparatively, 39.9% of Sanchez Energy shares are owned by institutional investors. 31.3% of Centennial Resource Development shares are owned by insiders. Comparatively, 11.1% of Sanchez Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Centennial Resource Development 14.13% 5.04% 3.90%
Sanchez Energy -9.24% -8.96% 1.59%

Volatility & Risk

Centennial Resource Development has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500. Comparatively, Sanchez Energy has a beta of 2.46, meaning that its share price is 146% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Centennial Resource Development and Sanchez Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centennial Resource Development 0 12 9 1 2.50
Sanchez Energy 1 6 0 0 1.86

Centennial Resource Development presently has a consensus price target of $17.88, indicating a potential upside of 126.27%. Sanchez Energy has a consensus price target of $2.07, indicating a potential upside of 1,761.86%. Given Sanchez Energy’s higher possible upside, analysts plainly believe Sanchez Energy is more favorable than Centennial Resource Development.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Centennial Resource Development $891.04 million 2.45 $199.90 million $0.75 10.53
Sanchez Energy $740.33 million 0.01 $43.19 million ($0.32) -0.35

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

Summary

Centennial Resource Development beats Sanchez Energy on 13 of the 15 factors compared between the two stocks.

Centennial Resource Development Company Profile

Centennial Resource Development, Inc., an independent oil and natural gas company, focuses on the development of unconventional oil and associated liquids-rich natural gas reserves in the United States. The company's assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks primarily in Reeves County in West Texas and Lea County in New Mexico. As of December 31, 2018, it leased or acquired approximately 80,223 net acres; and owned 1,597 net mineral acres in the Delaware Basin. The company was formerly known as Silver Run Acquisition Corporation and changed its name to Centennial Resource Development, Inc. in October 2016. Centennial Resource Development, Inc. was incorporated in 2015 and is headquartered in Denver, Colorado.

Sanchez Energy Company Profile

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.

Receive News & Ratings for Centennial Resource Development Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Centennial Resource Development and related companies with MarketBeat.com's FREE daily email newsletter.