Bonanza Creek Energy (NYSE: BCEI) and Gastar Exploration (NYSE:GST) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Bonanza Creek Energy and Gastar Exploration’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bonanza Creek Energy -53.37% -24.22% -4.05%
Gastar Exploration N/A N/A N/A

Analyst Ratings

This is a breakdown of recent ratings and target prices for Bonanza Creek Energy and Gastar Exploration, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bonanza Creek Energy 0 4 0 0 2.00
Gastar Exploration 0 3 1 0 2.25

Bonanza Creek Energy currently has a consensus price target of $25.00, suggesting a potential downside of 13.67%. Gastar Exploration has a consensus price target of $1.50, suggesting a potential upside of 170.90%. Given Gastar Exploration’s stronger consensus rating and higher probable upside, analysts clearly believe Gastar Exploration is more favorable than Bonanza Creek Energy.

Valuation & Earnings

This table compares Bonanza Creek Energy and Gastar Exploration’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bonanza Creek Energy $193.29 million 3.06 $76.38 million ($233.95) -0.12
Gastar Exploration $64.50 million 1.71 $36.39 million N/A N/A

Bonanza Creek Energy has higher revenue and earnings than Gastar Exploration.

Insider & Institutional Ownership

91.0% of Bonanza Creek Energy shares are owned by institutional investors. 0.6% of Bonanza Creek Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Gastar Exploration beats Bonanza Creek Energy on 6 of the 11 factors compared between the two stocks.

Bonanza Creek Energy Company Profile

Bonanza Creek Energy, Inc. (Bonanza Creek) is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and the Dorcheat Macedonia Field in southern Arkansas. In addition, the Company owns and operates oil-producing assets in the North Park Basin in Colorado and the McKamie Patton Field in southern Arkansas. The main areas in which the Company operates in the Rocky Mountain region are the Wattenberg Field in Weld County, Colorado and the North Park Basin in Jackson County, Colorado. Its Wattenberg Field operations are in the oil and liquids-weighted extension area of the Wattenberg Field targeting the Niobrara and Codell formations. In southern Arkansas, it targets the oil-rich Cotton Valley sands in the Dorcheat Macedonia and McKamie Patton Fields.

Gastar Exploration Company Profile

Gastar Exploration Inc., an independent energy company, engages in the exploration, development, and production of oil, condensate, natural gas, and natural gas liquids in the United States. Its principal activities include the identification, acquisition, exploration, and development of oil and natural gas properties on unconventional reserves, such as shale resource plays. The company holds interests in the oil and natural gas-rich reservoirs, including the Meramec and Osage, the Oswego limestone, the Woodford shale, and Hunton limestone formations. As of December 31, 2016, its principal assets included the STACK play covering approximately 83,800 net acres located in the Mid-Continent area of the United States, as well as approximately 14,500 net acres in the Appalachian Basin in West Virginia. The company was formerly known as Gastar Exploration Ltd. and changed its name to Gastar Exploration Inc. in January 2014. Gastar Exploration Inc. is based in Houston, Texas.

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