Southwestern Energy (NYSE:SWN) and Chaparral Energy (NYSE:CHAP) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Southwestern Energy and Chaparral Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwestern Energy 5 6 1 0 1.67
Chaparral Energy 0 0 2 0 3.00

Southwestern Energy presently has a consensus target price of $4.03, indicating a potential upside of 73.52%. Chaparral Energy has a consensus target price of $24.00, indicating a potential upside of 1,190.32%. Given Chaparral Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Chaparral Energy is more favorable than Southwestern Energy.

Profitability

This table compares Southwestern Energy and Chaparral Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwestern Energy 26.70% 19.16% 7.85%
Chaparral Energy -33.24% -1.48% -0.90%

Insider & Institutional Ownership

94.6% of Southwestern Energy shares are held by institutional investors. Comparatively, 94.0% of Chaparral Energy shares are held by institutional investors. 0.7% of Southwestern Energy shares are held by company insiders. Comparatively, 2.2% of Chaparral Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Southwestern Energy has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Chaparral Energy has a beta of 4, meaning that its stock price is 300% more volatile than the S&P 500.

Earnings and Valuation

This table compares Southwestern Energy and Chaparral Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southwestern Energy $3.86 billion 0.33 $537.00 million $1.02 2.27
Chaparral Energy $247.36 million 0.35 $33.44 million $0.31 6.00

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

Southwestern Energy Company Profile

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil in the United States. It operates through two segments, Exploration and Production, and Midstream. The company focuses on the development of unconventional natural gas reservoirs located in Pennsylvania and West Virginia. As of December 31, 2018, it had approximately 184,024 net acres in Northeast Appalachia; and approximately 297,445 net acres in Southwest Appalachia. The company's estimated proved natural gas, oil, and NGLs reserves comprise 11,921 billion cubic feet of natural gas equivalent (Bcfe); and 6,364 Bcfe of proved undeveloped reserves. Southwestern Energy Company was founded in 1929 and is headquartered in Spring, Texas.

Chaparral Energy Company Profile

Chaparral Energy, Inc. engages in the acquisition, exploration, development, production, and operation of onshore oil and natural gas properties primarily in Oklahoma, the United States. The company sells crude oil, natural gas, and natural gas liquids primarily to refineries and gas processing plant. The company was founded in 1988 and is headquartered in Oklahoma City, Oklahoma.

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