CONSOL Energy (NYSE: CNX) and Westmoreland Coal (NASDAQ:WLB) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitabiliy.

Institutional & Insider Ownership

75.2% of Westmoreland Coal shares are held by institutional investors. 1.5% of CONSOL Energy shares are held by company insiders. Comparatively, 1.4% of Westmoreland Coal shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

CONSOL Energy has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Westmoreland Coal has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Valuation and Earnings

This table compares CONSOL Energy and Westmoreland Coal’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CONSOL Energy $2.21 billion 1.69 $269.93 million ($3.44) -4.72
Westmoreland Coal $1.46 billion 0.06 $241.17 million ($4.22) -1.06

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

Analyst Ratings

This is a breakdown of current ratings and price targets for CONSOL Energy and Westmoreland Coal, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CONSOL Energy 0 7 4 0 2.36
Westmoreland Coal 0 0 3 0 3.00

CONSOL Energy presently has a consensus target price of $22.89, indicating a potential upside of 41.12%. Westmoreland Coal has a consensus target price of $15.33, indicating a potential upside of 243.80%. Given Westmoreland Coal’s stronger consensus rating and higher possible upside, analysts plainly believe Westmoreland Coal is more favorable than CONSOL Energy.

Profitability

This table compares CONSOL Energy and Westmoreland Coal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CONSOL Energy -36.01% -1.12% -0.49%
Westmoreland Coal -5.37% N/A -4.77%

Summary

CONSOL Energy beats Westmoreland Coal on 8 of the 13 factors compared between the two stocks.

CONSOL Energy Company Profile

CONSOL Energy Inc. (CONSOL Energy) is an integrated energy company. The Company’s divisions include Exploration and Production (E&P), Pennsylvania (PA) Mining Operations and Other. The E&P division operates through four segments: Marcellus Shale, Utica Shale, Coalbed Methane (CBM) and Other Gas, which produce pipeline quality natural gas for sale primarily to gas wholesalers. Its E&P division focuses on Appalachian area natural gas and liquids activities, including production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin. The Other Gas segment is primarily related to shallow oil and gas production and the Chattanooga Shale in Tennessee. The principal activities of the PA Mining Operations division are mining, preparation and marketing of thermal coal, sold primarily to power generators. The Other division includes business activities, such as coal terminal operations and water operations.

Westmoreland Coal Company Profile

Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.

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