Critical Analysis: Rex Energy Corporation (REXX) versus RSP Permian (RSPP)
Rex Energy Corporation (NASDAQ: REXX) and RSP Permian (NYSE:RSPP) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.
Earnings and Valuation
This table compares Rex Energy Corporation and RSP Permian’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Rex Energy Corporation||$165.40 million||0.14||$4.60 million||($7.23)||-0.33|
|RSP Permian||$569.59 million||8.83||$412.26 million||$0.48||66.08|
RSP Permian has higher revenue and earnings than Rex Energy Corporation. Rex Energy Corporation is trading at a lower price-to-earnings ratio than RSP Permian, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Rex Energy Corporation has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500. Comparatively, RSP Permian has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500.
Institutional & Insider Ownership
78.6% of RSP Permian shares are held by institutional investors. 7.9% of Rex Energy Corporation shares are held by company insiders. Comparatively, 15.0% of RSP Permian shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and price targets for Rex Energy Corporation and RSP Permian, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Rex Energy Corporation||0||3||1||0||2.25|
Rex Energy Corporation currently has a consensus target price of $6.58, indicating a potential upside of 175.40%. RSP Permian has a consensus target price of $46.37, indicating a potential upside of 46.20%. Given Rex Energy Corporation’s higher probable upside, research analysts plainly believe Rex Energy Corporation is more favorable than RSP Permian.
This table compares Rex Energy Corporation and RSP Permian’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Rex Energy Corporation||-37.94%||-140.84%||-4.04%|
RSP Permian beats Rex Energy Corporation on 13 of the 14 factors compared between the two stocks.
About Rex Energy Corporation
Rex Energy Corporation is an independent oil, natural gas liquid (NGL) and natural gas company. The Company has operations in the Appalachian Basin and Illinois Basin. In the Appalachian Basin, the Company is focused on its Marcellus Shale, Utica Shale and Upper Devonian (Burkett) Shale drilling and exploration activities. In the Illinois Basin, the Company is focused on its developmental oil drilling on its properties. The Company owns an interest in approximately 1,820 oil and natural gas wells. The Company produces an average of over 195.8 net millions of cubic feet equivalent (MMcfe) per day, composed of approximately 62.4% natural gas, over 9.5% oil and approximately 28.1% NGLs. In the Illinois Basin, the Company produces an average of approximately 1,998 barrels of oil per day (bopd). Including both developed and undeveloped acreage, the Company controls approximately 99,200 gross (over 79,700 net) acres in Illinois, Indiana and Kentucky.
About RSP Permian
RSP Permian, Inc. is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The Company’s properties are located on contiguous acreage blocks in the Midland Basin, and the Delaware Basin, both sub-basins of the Permian Basin. The Midland Basin properties are primarily in the adjacent counties of Midland, Martin, Andrews, Ector, Glasscock and Dawson. The Delaware Basin properties are in Loving and Winkler counties. The Company has drilled Lower Spraberry horizontal well and a Middle Spraberry horizontal well in the Permian Basin. In addition, it has also drilled a Wolfcamp B horizontal well in the North Midland Basin.
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