Financial Analysis: Mplx (NYSE:MPLX) vs. Matador Resources (NYSE:MTDR)

Matador Resources (NYSE:MTDR) and Mplx (NYSE:MPLX) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for Matador Resources and Mplx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matador Resources	0	4	12	0	2.75
Mplx	0	7	6	1	2.57

Matador Resources presently has a consensus target price of $68.50, suggesting a potential upside of 33.17%. Mplx has a consensus target price of $63.80, suggesting a potential upside of 12.88%. Given Matador Resources’ stronger consensus rating and higher probable upside, equities analysts clearly believe Matador Resources is more favorable than Mplx.

Dividends

Matador Resources pays an annual dividend of $1.50 per share and has a dividend yield of 2.9%. Mplx pays an annual dividend of $4.31 per share and has a dividend yield of 7.6%. Matador Resources pays out 25.7% of its earnings in the form of a dividend. Mplx pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Matador Resources has increased its dividend for 4 consecutive years and Mplx has increased its dividend for 9 consecutive years. Mplx is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

92.0% of Matador Resources shares are held by institutional investors. Comparatively, 24.2% of Mplx shares are held by institutional investors. 5.9% of Matador Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Matador Resources and Mplx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matador Resources	18.60%	14.53%	7.06%
Mplx	32.91%	30.27%	10.11%

Risk & Volatility

Matador Resources has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Mplx has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Valuation & Earnings

This table compares Matador Resources and Mplx”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matador Resources	$3.70 billion	1.72	$759.22 million	$5.83	8.82
Mplx	$13.00 billion	4.41	$4.91 billion	$4.65	12.15

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

Summary

Mplx beats Matador Resources on 10 of the 18 factors compared between the two stocks.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.

About Mplx

MPLX LP engages in the operation of midstream energy infrastructure and logistics assets, and distribution fuels services. It operates through the Crude Oil and Products Logistics and Natural Gas and NGL Services segments. The Crude Oil and Products Logistics segment transports, stores, distributes, and markets crude oil, asphalt, refined petroleum products, and water. The Natural Gas and NGL Services segment gathers, processes, and transports natural gas, and gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs). The company was founded on March 27, 2012 and is headquartered in Findlay, OH.