Reviewing Matador Resources (NYSE:MTDR) and Kinetik (NYSE:KNTK)

Kinetik (NYSE:KNTK) and Matador Resources (NYSE:MTDR) are both mid-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Earnings & Valuation

This table compares Kinetik and Matador Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinetik	$1.76 billion	5.12	$525.93 million	$2.76	20.17
Matador Resources	$3.84 billion	1.85	$759.22 million	$5.83	9.86

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Kinetik and Matador Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinetik	0	6	11	2	2.79
Matador Resources	0	5	12	1	2.78

Kinetik presently has a consensus price target of $55.53, indicating a potential downside of 0.23%. Matador Resources has a consensus price target of $66.81, indicating a potential upside of 16.26%. Given Matador Resources’ higher probable upside, analysts clearly believe Matador Resources is more favorable than Kinetik.

Risk & Volatility

Kinetik has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Matador Resources has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

21.1% of Kinetik shares are owned by institutional investors. Comparatively, 92.0% of Matador Resources shares are owned by institutional investors. 3.6% of Kinetik shares are owned by insiders. Comparatively, 5.9% of Matador Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Kinetik and Matador Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinetik	26.19%	-38.96%	7.07%
Matador Resources	19.85%	13.18%	6.46%

Dividends

Kinetik pays an annual dividend of $3.24 per share and has a dividend yield of 5.8%. Matador Resources pays an annual dividend of $1.50 per share and has a dividend yield of 2.6%. Kinetik pays out 117.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Matador Resources pays out 25.7% of its earnings in the form of a dividend. Kinetik has raised its dividend for 1 consecutive years and Matador Resources has raised its dividend for 4 consecutive years.

Summary

Matador Resources beats Kinetik on 11 of the 18 factors compared between the two stocks.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.