Callon Petroleum (NYSE:CPE) and PDC Energy (NASDAQ:PDCE) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Profitability

This table compares Callon Petroleum and PDC Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callon Petroleum 35.72% 7.57% 4.64%
PDC Energy 7.73% -3.08% -1.63%

Analyst Recommendations

This is a summary of current ratings and target prices for Callon Petroleum and PDC Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callon Petroleum 0 5 13 0 2.72
PDC Energy 0 3 16 0 2.84

Callon Petroleum currently has a consensus target price of $10.35, suggesting a potential upside of 142.39%. PDC Energy has a consensus target price of $50.00, suggesting a potential upside of 118.25%. Given Callon Petroleum’s higher possible upside, research analysts clearly believe Callon Petroleum is more favorable than PDC Energy.

Valuation and Earnings

This table compares Callon Petroleum and PDC Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Callon Petroleum $587.62 million 1.66 $300.36 million $0.82 5.21
PDC Energy $1.55 billion 0.93 $2.02 million ($2.96) -7.74

Callon Petroleum has higher earnings, but lower revenue than PDC Energy. PDC 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.

Risk and Volatility

Callon Petroleum has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, PDC Energy has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Summary

Callon Petroleum beats PDC Energy on 9 of the 12 factors compared between the two stocks.

Callon Petroleum Company Profile

Callon Petroleum Company, an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas and southeastern New Mexico. As of December 31, 2018, its estimated net proved reserves totaled 238.5 million barrel of oil equivalent, including 180.1 MMBbls of oil and 350.5 Bcf of natural gas. The company was founded in 1950 and is headquartered in Houston, Texas.

PDC Energy Company Profile

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. Its operations are primarily located in the Wattenberg Field in Colorado and the Delaware Basin in Texas. The company was formerly known as Petroleum Development Corporation and changed its name to PDC Energy, Inc. in June 2012. PDC Energy, Inc. was founded in 1969 and is headquartered in Denver, Colorado.

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