Matador Resources (NYSE: MTDR) and Laredo Petroleum (NYSE:LPI) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitabiliy, dividends, analyst recommendations, valuation, institutional ownership and risk.

Profitability

This table compares Matador Resources and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Matador Resources 43.04% 5.45% 2.68%
Laredo Petroleum 36.12% 126.35% 15.21%

Earnings & Valuation

This table compares Matador Resources and Laredo Petroleum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Matador Resources $453.48 million 5.17 $256.73 million $1.94 12.07
Laredo Petroleum $679.83 million 4.39 $136.05 million ($0.09) -136.87

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

Volatility & Risk

Matador Resources has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Institutional & Insider Ownership

86.6% of Matador Resources shares are owned by institutional investors. 11.9% of Matador Resources shares are owned by company insiders. Comparatively, 1.4% of Laredo Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Matador Resources and Laredo Petroleum, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Matador Resources 0 6 11 0 2.65
Laredo Petroleum 2 7 10 0 2.42

Matador Resources currently has a consensus target price of $28.54, suggesting a potential upside of 21.87%. Laredo Petroleum has a consensus target price of $14.58, suggesting a potential upside of 18.37%. Given Matador Resources’ stronger consensus rating and higher possible upside, equities analysts clearly believe Matador Resources is more favorable than Laredo Petroleum.

Summary

Matador Resources beats Laredo Petroleum on 9 of the 13 factors compared between the two stocks.

About Matador Resources

Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s segments include exploration and production, and midstream. The Company’s operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, the Company conducts midstream operations primarily, as of February 17, 2017, through its midstream joint venture, San Mateo Midstream, LLC (San Mateo or the Joint Venture).

About Laredo Petroleum

Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.

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