LinnCo (NASDAQ: LNCO) and Stone Energy Corporation (NYSE:SGY) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitabiliy and earnings.

Insider and Institutional Ownership

87.1% of Stone Energy Corporation shares are owned by institutional investors. 3.5% of Stone Energy Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for LinnCo and Stone Energy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LinnCo 0 0 0 0 N/A
Stone Energy Corporation 1 1 1 0 2.00

Stone Energy Corporation has a consensus price target of $6.50, indicating a potential downside of 67.07%. Given Stone Energy Corporation’s higher possible upside, analysts plainly believe Stone Energy Corporation is more favorable than LinnCo.

Valuation & Earnings

This table compares LinnCo and Stone Energy Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LinnCo N/A N/A N/A N/A N/A
Stone Energy Corporation $382.17 million 1.03 $194.01 million ($599.66) -0.03

Stone Energy Corporation has higher revenue and earnings than LinnCo.

Profitability

This table compares LinnCo and Stone Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LinnCo N/A N/A -367.18%
Stone Energy Corporation -7.94% -80.70% 22.82%

Summary

Stone Energy Corporation beats LinnCo on 6 of the 8 factors compared between the two stocks.

LinnCo Company Profile

LinnCo, LLC owns limited liability company interest in its affiliate, Linn Energy, LLC. Linn Energy, LLC’s properties are located in over eight operating regions in the United States, such as Hugoton Basin, including properties located in Kansas, the Oklahoma Panhandle and the Shallow Texas Panhandle; Rockies, including properties located in Wyoming, Utah, North Dakota and Colorado; California, including properties located in the San Joaquin Valley and Los Angeles basins; east Texas and north Louisiana, including properties located in east Texas and north Louisiana; Mid-Continent, including Oklahoma properties located in the Anadarko and Arkoma basins, as well as waterfloods in the Central Oklahoma Platform; Michigan/Illinois, including properties located in the Antrim Shale formation in north Michigan and oil properties in south Illinois; Permian Basin, including properties located in west Texas and southeast New Mexico, and South Texas.

Stone Energy Corporation Company Profile

Stone Energy Corporation is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. The Company operates in the Gulf of Mexico (GOM) basin. It has leveraged its operations in the GOM conventional shelf and has its reserve base in the prolific basins of the GOM deep water, Gulf Coast deep gas, and the Marcellus and Utica shales in Appalachia. Its estimated proved oil and natural gas reserves are over 60 million barrels of oil equivalents (MMBoe) or 340 billion cubic feet equivalent (Bcfe). Over 95 MMBoe or 570 Bcfe of its estimated proved reserves are revised downward. It has made investments in seismic data and leasehold interests, and has geological, geophysical, engineering and operational operations in deep water arena to evaluate potential exploration, development and acquisition opportunities. It holds over two deep water platforms, producing reserves and various leases.

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