Head-To-Head Survey: Diamondback Energy (NASDAQ:FANG) & Tullow Oil (OTCMKTS:TUWLF)

Tullow Oil (OTCMKTS:TUWLF) and Diamondback Energy (NASDAQ:FANG) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Tullow Oil and Diamondback Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tullow Oil	0	0	0	0	0.00
Diamondback Energy	0	5	15	4	2.96

Diamondback Energy has a consensus target price of $222.21, suggesting a potential upside of 8.66%. Given Diamondback Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Diamondback Energy is more favorable than Tullow Oil.

Dividends

Tullow Oil pays an annual dividend of $0.20 per share and has a dividend yield of 63.0%. Diamondback Energy pays an annual dividend of $4.40 per share and has a dividend yield of 2.2%. Tullow Oil pays out -89.4% of its earnings in the form of a dividend. Diamondback Energy pays out 85.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diamondback Energy has raised its dividend for 7 consecutive years. Tullow Oil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Tullow Oil and Diamondback Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tullow Oil	N/A	N/A	N/A
Diamondback Energy	8.58%	10.10%	6.16%

Institutional and Insider Ownership

37.0% of Tullow Oil shares are held by institutional investors. Comparatively, 90.0% of Diamondback Energy shares are held by institutional investors. 0.6% of Diamondback Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Tullow Oil and Diamondback Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tullow Oil	N/A	N/A	N/A	($0.22)	-1.42
Diamondback Energy	$15.03 billion	3.81	$1.66 billion	$5.13	39.86

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

Summary

Diamondback Energy beats Tullow Oil on 13 of the 15 factors compared between the two stocks.

About Tullow Oil

Tullow Oil plc engages in the oil and gas exploration, development, and production activities primarily in Africa, Europe, and South America. The company was founded in 1985 and is headquartered in London, the United Kingdom.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.