Concho Resources (NYSE:CXO) and Carrizo Oil & Gas (NASDAQ:CRZO) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Concho Resources and Carrizo Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Concho Resources 34.13% 5.37% 3.54%
Carrizo Oil & Gas 5.84% 52.59% 7.69%

Analyst Ratings

This is a summary of recent ratings and target prices for Concho Resources and Carrizo Oil & Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Concho Resources 0 7 17 0 2.71
Carrizo Oil & Gas 0 7 12 1 2.70

Concho Resources currently has a consensus target price of $178.55, indicating a potential upside of 18.62%. Carrizo Oil & Gas has a consensus target price of $29.72, indicating a potential upside of 16.51%. Given Concho Resources’ stronger consensus rating and higher possible upside, research analysts clearly believe Concho Resources is more favorable than Carrizo Oil & Gas.

Valuation & Earnings

This table compares Concho Resources and Carrizo Oil & Gas’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Concho Resources $2.59 billion 11.66 $956.00 million $2.09 72.02
Carrizo Oil & Gas $745.89 million 2.81 $87.11 million $1.43 17.84

Concho Resources has higher revenue and earnings than Carrizo Oil & Gas. Carrizo Oil & Gas is trading at a lower price-to-earnings ratio than Concho Resources, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Concho Resources has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Carrizo Oil & Gas has a beta of 2.2, suggesting that its stock price is 120% more volatile than the S&P 500.

Institutional & Insider Ownership

77.4% of Concho Resources shares are held by institutional investors. 1.1% of Concho Resources shares are held by insiders. Comparatively, 5.4% of Carrizo Oil & Gas shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Concho Resources beats Carrizo Oil & Gas on 10 of the 15 factors compared between the two stocks.

Concho Resources Company Profile

Concho Resources Inc., an independent oil and natural gas company, engages in the acquisition, development, and exploration of oil and natural gas properties in the United States. The company's principal operating areas are located in the Permian Basin of southeast New Mexico and west Texas. As of December 31, 2017, its total estimated proved reserves were 840 million barrels of oil equivalent. Concho Resources Inc. was founded in 2006 and is headquartered in Midland, Texas.

Carrizo Oil & Gas Company Profile

Carrizo Oil & Gas, Inc., together with its subsidiaries, engages in the exploration, development, and production of crude oil, natural gas liquids, and gas from resource plays primarily in the United States. The company holds interests in oil and gas plays, including Eagle Ford Shale in South Texas; and the Delaware Basin in West Texas. As of December 31, 2017, it had proved oil and gas reserves of 261.7 million barrels of oil equivalent; and operated 563.7 net productive oil and gas wells. The company was founded in 1993 and is based in Houston, Texas.

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