Head to Head Analysis: Evolution Petroleum (NYSE:EPM) vs. Sanchez Energy (OTCMKTS:SNEC)

Sanchez Energy (OTCMKTS:SNEC) and Evolution Petroleum (NYSE:EPM) are both small-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Sanchez Energy and Evolution Petroleum, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sanchez Energy	0	0	0	0	0.00
Evolution Petroleum	0	2	3	0	2.60

Evolution Petroleum has a consensus target price of $5.73, suggesting a potential upside of 36.18%. Given Evolution Petroleum’s stronger consensus rating and higher probable upside, analysts plainly believe Evolution Petroleum is more favorable than Sanchez Energy.

Earnings & Valuation

This table compares Sanchez Energy and Evolution Petroleum”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sanchez Energy	$1.06 billion	0.00	$85.21 million	N/A	N/A
Evolution Petroleum	$85.23 million	1.71	$4.08 million	($0.01)	-421.00

Sanchez Energy has higher revenue and earnings than Evolution Petroleum.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sanchez Energy	2.22%	-18.15%	3.09%
Evolution Petroleum	2.04%	2.42%	1.20%

Volatility and Risk

Sanchez Energy has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, Evolution Petroleum has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Insider and Institutional Ownership

0.6% of Sanchez Energy shares are held by institutional investors. Comparatively, 60.1% of Evolution Petroleum shares are held by institutional investors. 11.1% of Sanchez Energy shares are held by insiders. Comparatively, 10.5% of Evolution Petroleum shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Sanchez Energy beats Evolution Petroleum on 6 of the 11 factors compared between the two stocks.

About Sanchez Energy

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of onshore unconventional oil and natural gas resources in the United States. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2018, the company had assembled approximately 271,000 net acres in the Eagle Ford Shale; and owned approximately 34,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered in Houston, Texas.

About Evolution Petroleum

Evolution Petroleum Corporation, an energy company, engages in the development, production, ownership, and exploitation of onshore oil and gas properties in the United States. The company holds a non-operated interests in the SCOOP and STACK plays located in Central Oklahoma; the Chaveroo Field situated in Chaves and Roosevelt Counties, New Mexico; the Jonah Field located in Sublette County, Wyoming; the Williston Basin situated in Williston, North Dakota; the Barnett Shale field located in North Texas; the Hamilton Dome situated in Hot Springs County, Wyoming; and the Delhi Field, an onshore CO2-EOR project located in northeast Louisiana in Franklin, Madison, and Richland Parishes, as well as small overriding royalty interests in four onshore central Texas wells. The company was founded in 2003 and is based in Houston, Texas.