Matador Resources (NYSE: MTDR) and VAALCO Energy (NYSE:EGY) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Institutional and Insider Ownership

85.4% of Matador Resources shares are held by institutional investors. Comparatively, 38.2% of VAALCO Energy shares are held by institutional investors. 11.9% of Matador Resources shares are held by company insiders. Comparatively, 2.6% of VAALCO Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Matador Resources 40.30% 5.99% 3.15%
VAALCO Energy 3.43% 77.99% 4.27%

Valuation & Earnings

This table compares Matador Resources and VAALCO Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Matador Resources $264.42 million 11.06 -$97.42 million $1.96 13.76
VAALCO Energy $59.78 million 0.73 -$26.55 million $0.07 10.57

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

Risk and Volatility

Matador Resources has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, VAALCO Energy has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Matador Resources and VAALCO Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Matador Resources 0 5 12 0 2.71
VAALCO Energy 0 1 0 0 2.00

Matador Resources currently has a consensus target price of $29.88, suggesting a potential upside of 10.77%. VAALCO Energy has a consensus target price of $2.00, suggesting a potential upside of 170.27%. Given VAALCO Energy’s higher possible upside, analysts clearly believe VAALCO Energy is more favorable than Matador Resources.

Summary

Matador Resources beats VAALCO Energy on 10 of the 14 factors compared between the two stocks.

About Matador Resources

Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s segments include exploration and production, and midstream. The Company’s operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, the Company conducts midstream operations primarily, as of February 17, 2017, through its midstream joint venture, San Mateo Midstream, LLC (San Mateo or the Joint Venture).

About VAALCO Energy

VAALCO Energy, Inc. is an independent energy company. The Company is engaged in the acquisition, exploration, development and production of crude oil and natural gas. Its segments include Gabon, Angola, Equatorial Guinea, the United States, and Corporate and other, which includes corporate and operations support. It owns producing properties and conducts exploration activities as an operator in Gabon, West Africa; conducts exploration activities as an operator in Angola, West Africa, and participates in exploration and development activities as a non-operator in Equatorial Guinea, West Africa. In the United States, it operates unconventional resource properties in North Texas and hold undeveloped leasehold acreage in Montana. It also owns minor interests in conventional production activities as a non-operator in the United States. Its Etame Marin block is located offshore the Republic of Gabon. It owns over 640-acre lease in the Hefley field (Granite Wash formation) in North Texas.

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