Apache Corporation (NYSE: APA) and Earthstone Energy (NASDAQ:ESTE) are both oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Profitability

This table compares Apache Corporation and Earthstone Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apache Corporation 10.60% -0.70% -0.25%
Earthstone Energy -213.24% -28.83% -39.07%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Apache Corporation and Earthstone Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apache Corporation 7 9 2 0 1.72
Earthstone Energy 0 1 5 0 2.83

Apache Corporation currently has a consensus target price of $47.38, indicating a potential upside of 8.93%. Earthstone Energy has a consensus target price of $14.50, indicating a potential upside of 61.11%. Given Earthstone Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Earthstone Energy is more favorable than Apache Corporation.

Earnings & Valuation

This table compares Apache Corporation and Earthstone Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Apache Corporation $5.35 billion 3.09 -$1.41 billion $1.74 24.99
Earthstone Energy N/A N/A N/A ($2.13) -4.23

Earthstone Energy has higher revenue, but lower earnings than Apache Corporation. Earthstone Energy is trading at a lower price-to-earnings ratio than Apache Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Apache Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Earthstone Energy does not pay a dividend. Apache Corporation pays out 57.5% of its earnings in the form of a dividend. Apache Corporation has increased its dividend for 5 consecutive years.

Risk and Volatility

Apache Corporation has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Earthstone Energy has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Institutional & Insider Ownership

95.0% of Apache Corporation shares are owned by institutional investors. 0.5% of Apache Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Apache Corporation beats Earthstone Energy on 9 of the 14 factors compared between the two stocks.

About Apache Corporation

Apache Corporation is an independent energy company. The Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. The Company’s production segments include: the United States, Egypt and the United Kingdom North Sea. It also pursues exploration interests in Suriname. In North America, the Company has three onshore regions: The Permian region, The Midcontinent/Gulf Coast region. The Permian region located in West Texas and New Mexico includes the Permian sub-basins, the Midland Basin, Central Basin Platform/Northwest Shelf and Delaware Basin. The Midcontinent/Gulf Coast region includes the Granite Wash, Tonkawa, Canyon Lime, Marmaton, and Cleveland formations of the West Anadarko Basin, the Woodford-SCOOP and Stack plays located in Central Oklahoma, and the Eagle Ford shale in South East Texas.

About Earthstone Energy

Earthstone Energy, Inc. is an independent oil and natural gas development and production company. The Company is also engaged in corporate mergers and the acquisition of oil and natural gas properties that have production and future development opportunities. Its operations are all in the upstream segment of the oil and natural gas industry and all its properties are onshore in the United States. The Company’s reserve portfolio primarily consists of assets in the Midland Basin of west Texas, the Eagle Ford trend of south Texas and in the Williston Basin of North Dakota. As of December 31, 2016, the Company held approximately 5,900 net leasehold acres in the Midland Basin, located in Howard, Glasscock, Martin and Midland Counties. As of December 31, 2016, it also has approximately 21,000 net leasehold acres in the Eagle Ford trend of south Texas. In the Williston Basin of North Dakota, it had approximately 5,900 net leasehold acres, as of December 31, 2016.

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