Analyzing Diamondback Energy (FANG) and EQT Corporation (EQT)
Diamondback Energy (NASDAQ: FANG) and EQT Corporation (NYSE:EQT) are both mid-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.
This is a summary of current recommendations for Diamondback Energy and EQT Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Diamondback Energy presently has a consensus price target of $115.95, indicating a potential upside of 19.15%. EQT Corporation has a consensus price target of $81.27, indicating a potential upside of 26.00%. Given EQT Corporation’s higher possible upside, analysts clearly believe EQT Corporation is more favorable than Diamondback Energy.
Insider and Institutional Ownership
90.6% of EQT Corporation shares are owned by institutional investors. 0.4% of Diamondback Energy shares are owned by company insiders. Comparatively, 1.0% of EQT Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares Diamondback Energy and EQT Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Diamondback Energy has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, EQT Corporation has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.
Valuation and Earnings
This table compares Diamondback Energy and EQT Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Diamondback Energy||$829.62 million||11.51||$676.65 million||$3.36||28.96|
|EQT Corporation||$2.46 billion||4.54||$1.53 billion||$0.03||2,150.72|
EQT Corporation has higher revenue and earnings than Diamondback Energy. Diamondback Energy is trading at a lower price-to-earnings ratio than EQT Corporation, indicating that it is currently the more affordable of the two stocks.
EQT Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Diamondback Energy does not pay a dividend. EQT Corporation pays out 400.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Diamondback Energy beats EQT Corporation on 9 of the 16 factors compared between the two stocks.
Diamondback Energy Company Profile
Diamondback Energy, Inc. is an independent oil and natural gas company. The Company focuses on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. As of December 31, 2016, the Company’s total net acreage position in the Permian Basin was approximately 105,894 net acres. As of December 31, 2016, the Company, through its subsidiary, Viper Energy Partners LP (Viper), owned mineral interests underlying approximately 107,568 gross acres primarily in Midland County, Texas in the Permian Basin. The Permian Basin area covers a portion of western Texas and eastern New Mexico. The Company’s reserves are located in the Permian Basin of West Texas, in particular in the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations. The Company refers to the Clearfork, Spraberry, Wolfcamp, Strawn and Atoka formations collectively as the Wolfberry play.
EQT Corporation Company Profile
EQT Corporation is a natural gas company. The Company operates through three segments: EQT Production, EQT Gathering and EQT Transmission. The EQT Production segment includes its exploration for, and development and production of, natural gas, natural gas liquids and a limited amount of crude oil, primarily in the Appalachian Basin. The EQT Production segment also includes the marketing activities of the Company. EQT Production’s properties are located in Pennsylvania, West Virginia, Kentucky and Virginia. The operations of EQT Gathering include the natural gas gathering activities of the Company, consisting solely of assets that are owned and operated by EQT Midstream Partners, LP (EQM). The operations of EQT Transmission include the natural gas transmission and storage activities of the Company, consisting solely of assets that are owned and operated by EQM. EQT Transmission focuses on various transmission projects, including Mountain Valley Pipeline and Transmission Expansion.
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