Halcon Resources Corporation (NYSE: HK) and Ring Energy (NYSE:REI) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Earnings and Valuation

This table compares Halcon Resources Corporation and Ring Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Halcon Resources Corporation $488.44 million 1.82 $223.78 million ($3.77) -1.64
Ring Energy $42.26 million 16.50 $21.77 million N/A N/A

Halcon Resources Corporation has higher revenue and earnings than Ring Energy.

Profitability

This table compares Halcon Resources Corporation and Ring Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Halcon Resources Corporation -65.92% 16.78% 4.27%
Ring Energy N/A N/A N/A

Insider and Institutional Ownership

91.6% of Halcon Resources Corporation shares are held by institutional investors. 53.9% of Halcon Resources Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Halcon Resources Corporation and Ring Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Halcon Resources Corporation 0 3 6 0 2.67
Ring Energy 0 0 6 0 3.00

Halcon Resources Corporation currently has a consensus price target of $9.43, indicating a potential upside of 52.07%. Ring Energy has a consensus price target of $18.60, indicating a potential upside of 44.41%. Given Halcon Resources Corporation’s higher possible upside, equities research analysts clearly believe Halcon Resources Corporation is more favorable than Ring Energy.

Summary

Halcon Resources Corporation beats Ring Energy on 7 of the 10 factors compared between the two stocks.

About Halcon Resources Corporation

Halcon Resources Corporation is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The Company’s estimated total proved oil and natural gas reserves are approximately 146.8 million barrels of oil equivalent (MMBoe), consisting of over 120.7 million barrels of oil (MMBbls), approximately 13.0 MMBbls of natural gas liquids and over 78.4 billion cubic feet (Bcf) of natural gas. The Company’s oil and natural gas assets consist of undeveloped acreage positions in unconventional liquids-rich basins/fields. The Company has reserves in its core resource plays of approximately 143.6 MMBoe, of which over 92% are oil and natural gas liquids, and approximately 55% are proved developed. The Company has working interests in approximately 123,000 net acres prospective in the Bakken/Three Forks formations in North Dakota.

About Ring Energy

Ring Energy, Inc. acquires, explores for, develops, and produces oil and natural gas in Texas and Kansas, the United States. As of December 31, 2016, its proved reserves consisted of approximately 27.7 million barrel of oil equivalent. The company also owns interests in 32,663 net developed and undeveloped acres in Andrews and Gaines counties, and 20,490 net developed and undeveloped acres in Reeves and Culberson counties, Texas; and 14,549 net developed and undeveloped acres in Kansas. It primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The company was formerly known as Transglobal Mining Corp. and changed its name to Ring Energy, Inc. in March 2008. Ring Energy, Inc. was founded in 2004 and is headquartered in Midland, Texas.

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