Financial Analysis: Callon Petroleum (CPE) & Noble Energy (NBL)
Noble Energy (NYSE: NBL) and Callon Petroleum (NYSE:CPE) are both mid-cap oil & gas exploration and production – nec companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
This is a summary of recent ratings and price targets for Noble Energy and Callon Petroleum, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Noble Energy presently has a consensus price target of $40.48, suggesting a potential upside of 40.01%. Callon Petroleum has a consensus price target of $17.57, suggesting a potential upside of 48.61%. Given Callon Petroleum’s stronger consensus rating and higher probable upside, analysts plainly believe Callon Petroleum is more favorable than Noble Energy.
Valuation & Earnings
This table compares Noble Energy and Callon Petroleum’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Noble Energy||$3.49 billion||4.03||-$998.00 million||($3.99)||-7.25|
|Callon Petroleum||$200.85 million||11.88||-$91.81 million||$0.50||23.64|
Callon Petroleum has higher revenue, but lower earnings than Noble Energy. Noble Energy is trading at a lower price-to-earnings ratio than Callon Petroleum, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
91.7% of Noble Energy shares are owned by institutional investors. 2.3% of Noble Energy shares are owned by company insiders. Comparatively, 0.8% of Callon Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Noble Energy pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Callon Petroleum does not pay a dividend. Noble Energy pays out -10.0% of its earnings in the form of a dividend.
Volatility & Risk
Noble Energy has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Callon Petroleum has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.
This table compares Noble Energy and Callon Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Callon Petroleum beats Noble Energy on 10 of the 16 factors compared between the two stocks.
Noble Energy Company Profile
Noble Energy, Inc. is an independent energy company. The Company is engaged in crude oil, natural gas and natural gas and natural gas liquids (NGLs) exploration, development, production and acquisition. The Company’s segments include: United States, including the onshore DJ Basin, Permian Basin, Eagle Ford Shale, Marcellus Shale and offshore deepwater Gulf of Mexico, as well as the consolidated accounts of Noble Midstream Partners LP (Noble Midstream Partners); Eastern Mediterranean, including offshore Israel and Cyprus; West Africa, including offshore Equatorial Guinea, Cameroon and Gabon, and Other International and Corporate, including new ventures, such as offshore the Falkland Islands, Suriname and Newfoundland. The Company’s portfolio of assets is diversified through the United States and international projects and production mix among crude oil, natural gas and NGLs. Its business focuses on both the United States unconventional basins and certain global conventional basins.
Callon Petroleum Company Profile
Callon Petroleum Company is an independent oil and natural gas company. The Company is engaged in the exploration, development, acquisition and production of oil and natural gas properties. The Company focuses on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and southeastern New Mexico and consisted of three primary sub-basins: the Midland Basin, the Delaware Basin, and the Central Basin Platform as of December 31, 2016. The Company’s drilling activity focuses on the horizontal development of various prospective intervals in the Midland Basin, including multiple levels of the Wolfcamp formation and the Lower Spraberry shale. It owns additional immaterial properties in Louisiana. As of December 31, 2016, the Company had owned leaseholds in 39,570 net acres in the Permian Basin, all of which was located in the Midland Basin.
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