Petroquest Energy (NYSE: PQ) and Diamondback Energy (NASDAQ:FANG) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitabiliy.

Institutional and Insider Ownership

40.3% of Petroquest Energy shares are owned by institutional investors. Comparatively, 98.3% of Diamondback Energy shares are owned by institutional investors. 9.4% of Petroquest Energy shares are owned by company insiders. Comparatively, 0.4% of Diamondback Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Petroquest Energy has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500. Comparatively, Diamondback Energy has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Valuation & Earnings

This table compares Petroquest Energy and Diamondback Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Petroquest Energy $69.80 million 0.61 $22.97 million ($3.38) -0.59
Diamondback Energy $673.25 million 13.41 $497.06 million ($0.42) -219.02

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

Profitability

This table compares Petroquest Energy and Diamondback Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Petroquest Energy -81.13% N/A -23.54%
Diamondback Energy 0.62% 6.51% 5.10%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Petroquest Energy and Diamondback Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Petroquest Energy 0 3 2 0 2.40
Diamondback Energy 0 3 23 0 2.88

Petroquest Energy presently has a consensus target price of $4.67, indicating a potential upside of 133.33%. Diamondback Energy has a consensus target price of $115.96, indicating a potential upside of 26.06%. Given Petroquest Energy’s higher probable upside, equities analysts plainly believe Petroquest Energy is more favorable than Diamondback Energy.

Summary

Diamondback Energy beats Petroquest Energy on 10 of the 13 factors compared between the two stocks.

Petroquest Energy Company Profile

PetroQuest Energy, Inc. is an oil and gas company. The Company is engaged in exploratory, development and acquisition activities. The Company has approximately 30 gross exploratory wells and over 30 gross development wells. The Company has reserves in various areas, including East Texas, Gulf Coast Basin and Oklahoma Woodford. Its annual production from East Texas area is approximately 114.1 billions of cubic feet equivalent (Bcfe); Gulf Coast Basin is over 43.9 Bcfe, and Oklahoma Woodford is approximately 20.0 Bcfe. The net production from its East Texas assets averages over 30.4 millions of cubic feet equivalent (MMcfe) per day. Production from Gulf Coast Basin area totals approximately 37.8 MMcfe per day. The average daily production from its Oklahoma-Woodford properties totals over 25 MMcfe per day. The Company sells its oil and natural gas production under fixed or floating market contracts.

Diamondback Energy Company Profile

Diamondback Energy, Inc. is an independent oil and natural gas company. The Company focuses on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. As of December 31, 2016, the Company’s total net acreage position in the Permian Basin was approximately 105,894 net acres. As of December 31, 2016, the Company, through its subsidiary, Viper Energy Partners LP (Viper), owned mineral interests underlying approximately 107,568 gross acres primarily in Midland County, Texas in the Permian Basin. The Permian Basin area covers a portion of western Texas and eastern New Mexico. The Company’s reserves are located in the Permian Basin of West Texas, in particular in the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations. The Company refers to the Clearfork, Spraberry, Wolfcamp, Strawn and Atoka formations collectively as the Wolfberry play.

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