U.S. Energy (NASDAQ:USEG) and Magnolia Oil & Gas (NYSE:MGY) Critical Contrast

Magnolia Oil & Gas (NYSE:MGY) and U.S. Energy (NASDAQ:USEG) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Insider and Institutional Ownership

94.7% of Magnolia Oil & Gas shares are owned by institutional investors. Comparatively, 3.0% of U.S. Energy shares are owned by institutional investors. 1.2% of Magnolia Oil & Gas shares are owned by insiders. Comparatively, 61.0% of U.S. Energy 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 Magnolia Oil & Gas and U.S. Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnolia Oil & Gas	24.79%	16.67%	11.53%
U.S. Energy	-240.93%	-70.53%	-38.35%

Valuation and Earnings

This table compares Magnolia Oil & Gas and U.S. Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnolia Oil & Gas	$1.31 billion	4.12	$325.25 million	$1.72	16.88
U.S. Energy	$20.62 million	2.25	-$25.78 million	($0.83)	-1.27

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

Risk and Volatility

Magnolia Oil & Gas has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, U.S. Energy has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Magnolia Oil & Gas and U.S. Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnolia Oil & Gas	0	9	8	0	2.47
U.S. Energy	1	0	1	0	2.00

Magnolia Oil & Gas currently has a consensus target price of $28.18, indicating a potential downside of 2.91%. U.S. Energy has a consensus target price of $3.50, indicating a potential upside of 233.33%. Given U.S. Energy’s higher possible upside, analysts plainly believe U.S. Energy is more favorable than Magnolia Oil & Gas.

Summary

Magnolia Oil & Gas beats U.S. Energy on 12 of the 14 factors compared between the two stocks.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.

About U.S. Energy

U.S. Energy Corp., an independent energy company, focuses on the acquisition, exploration, and development of oil and natural gas properties in the United States. It holds interests in various oil and gas properties located in the Rockies region, including Montana, Wyoming, and North Dakota; the Mid-Continent region comprising Oklahoma, Kansas, and North and East Texas; West Texas; South Texas; and the Gulf Coast regions. The company was incorporated in 1966 and is headquartered in Houston, Texas.