Clayton Williams Energy (NYSE: CWEI) and Rice Energy (NYSE:RICE) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Valuation & Earnings

This table compares Clayton Williams Energy and Rice Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Clayton Williams Energy N/A N/A N/A ($23.46) -5.62
Rice Energy $1.28 billion 4.79 $800.57 million ($0.34) -84.32

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

Institutional & Insider Ownership

67.8% of Clayton Williams Energy shares are owned by institutional investors. Comparatively, 96.1% of Rice Energy shares are owned by institutional investors. 36.4% of Clayton Williams Energy shares are owned by insiders. Comparatively, 1.7% of Rice Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Clayton Williams Energy and Rice Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clayton Williams Energy 0 2 0 0 2.00
Rice Energy 0 20 6 0 2.23

Clayton Williams Energy presently has a consensus price target of $90.00, indicating a potential downside of 31.77%. Rice Energy has a consensus price target of $28.21, indicating a potential downside of 1.59%. Given Rice Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Rice Energy is more favorable than Clayton Williams Energy.

Profitability

This table compares Clayton Williams Energy and Rice Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clayton Williams Energy -16.83% -63.50% -7.44%
Rice Energy -3.00% 3.27% 2.03%

Risk & Volatility

Clayton Williams Energy has a beta of 2.34, indicating that its share price is 134% more volatile than the S&P 500. Comparatively, Rice Energy has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500.

Summary

Rice Energy beats Clayton Williams Energy on 9 of the 11 factors compared between the two stocks.

Clayton Williams Energy Company Profile

Clayton Williams Energy, Inc. is an independent oil and gas company engaged in the exploration for and production of oil and natural gas primarily in its core area in Southern Reeves County, Texas. The Company operates through two segments: oil and gas exploration and production, and contract drilling services. The Company focuses on developmental drilling in prolific oil shale provinces. The Company has holdings in the oil shale plays in the United States, the Wolfcamp Shale in the Southern Delaware Basin of West Texas. Its exploration program consists of generating exploratory prospects, leasing the acreage related to these prospects, drilling exploratory wells on these prospects to determine if recoverable oil and gas reserves exist, drilling developmental wells on these prospects and producing and selling any resulting oil and gas production. The Permian Basin is a sedimentary basin in West Texas and Southeastern New Mexico.

Rice Energy Company Profile

Rice Energy Inc. (Rice Energy) is an independent natural gas and oil company. The Company is engaged in the acquisition, exploration and development of natural gas, oil and natural gas liquids (NGL) properties in the Appalachian Basin. The Company conducts its operations through two segments: Exploration and Production, and Midstream. The Exploration and Production segment is engaged in the acquisition, exploration and development of natural gas, oil and NGLs. The Exploration and Production segment operates in the cores of the Marcellus and Utica Shales. The Company controls approximately 231,000 net acres in the Marcellus and Ohio Utica Shale cores. It operates approximately 1,164 drilling locations. The Midstream segment is engaged in the gathering and compression of natural gas, oil and NGL production of, and in the provision of water services to support the well completion activities of, Rice Energy and third parties.

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