Chaparral Energy (NYSE:CHAP) and Sanchez Energy (NYSE:SN) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Insider and Institutional Ownership

77.5% of Chaparral Energy shares are held by institutional investors. Comparatively, 39.9% of Sanchez Energy shares are held by institutional investors. 2.2% of Chaparral Energy shares are held by insiders. Comparatively, 11.1% of Sanchez Energy shares are held 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 Chaparral Energy and Sanchez Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chaparral Energy -24.76% -0.91% -0.56%
Sanchez Energy -9.24% -8.96% 1.59%

Volatility and Risk

Chaparral Energy has a beta of 3.76, indicating that its share price is 276% more volatile than the S&P 500. Comparatively, Sanchez Energy has a beta of 2.46, indicating that its share price is 146% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Chaparral Energy and Sanchez Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chaparral Energy 0 0 2 0 3.00
Sanchez Energy 1 6 0 0 1.86

Chaparral Energy presently has a consensus target price of $24.00, suggesting a potential upside of 474.16%. Sanchez Energy has a consensus target price of $2.07, suggesting a potential upside of 2,852.38%. Given Sanchez Energy’s higher probable upside, analysts clearly believe Sanchez Energy is more favorable than Chaparral Energy.

Valuation and Earnings

This table compares Chaparral Energy and Sanchez Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chaparral Energy $247.36 million 0.78 $33.44 million $0.31 13.48
Sanchez Energy $740.33 million 0.01 $43.19 million ($0.32) -0.22

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

Summary

Chaparral Energy beats Sanchez Energy on 8 of the 14 factors compared between the two stocks.

Chaparral Energy Company Profile

Chaparral Energy, Inc. engages in the acquisition, exploration, development, production, and operation of onshore oil and natural gas properties primarily in Oklahoma, the United States. The company sells crude oil, natural gas, and natural gas liquids primarily to refineries and gas processing plant. The company was founded in 1988 and is headquartered in Oklahoma City, Oklahoma.

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.

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