Linn Energy (NASDAQ: LINE) and Stone Energy Corporation (NYSE:SGY) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Analyst Recommendations

This is a summary of recent recommendations for Linn Energy and Stone Energy Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Linn Energy 0 0 0 0 N/A
Stone Energy Corporation 1 1 1 0 2.00

Stone Energy Corporation has a consensus price target of $6.50, suggesting a potential downside of 78.25%. Given Stone Energy Corporation’s higher probable upside, analysts clearly believe Stone Energy Corporation is more favorable than Linn Energy.

Insider & Institutional Ownership

96.3% of Stone Energy Corporation shares are held by institutional investors. 3.5% of Stone Energy 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.

Valuation & Earnings

This table compares Linn Energy and Stone Energy Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Linn Energy N/A N/A N/A N/A N/A
Stone Energy Corporation $364.82 million 1.64 $201.90 million N/A N/A

Stone Energy Corporation has higher revenue and earnings than Linn Energy.

Profitability

This table compares Linn Energy and Stone Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Linn Energy -51.43% N/A -10.69%
Stone Energy Corporation 41.74% -215.45% 29.97%

Summary

Stone Energy Corporation beats Linn Energy on 7 of the 8 factors compared between the two stocks.

Linn Energy Company Profile

Linn Energy, Inc., formerly Linn Energy, LLC, is an oil and natural gas company. The Company focuses on acquiring, developing and maximizing cash flow from a portfolio of oil and natural gas asset. Its properties include Hugoton Basin, which includes properties located in Kansas, the Oklahoma Panhandle and the Shallow Texas Panhandle; Rockies, which includes properties located in Wyoming, Utah, North Dakota and Colorado; California, which includes properties located in the San Joaquin Valley and Los Angeles basins; TexLa, which includes properties located in east Texas and north Louisiana; Mid-Continent, which includes Oklahoma properties located in the Anadarko and Arkoma basins, as well as waterfloods in the Central Oklahoma Platform; Michigan/Illinois, which includes properties located in the Antrim Shale formation in north Michigan and oil properties in south Illinois; Permian Basin, which includes properties located in west Texas and southeast New Mexico, and South Texas.

Stone Energy Corporation Company Profile

Stone Energy Corporation is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. The Company operates in the Gulf of Mexico (GOM) basin. It has leveraged its operations in the GOM conventional shelf and has its reserve base in the prolific basins of the GOM deep water, Gulf Coast deep gas, and the Marcellus and Utica shales in Appalachia. Its estimated proved oil and natural gas reserves are over 60 million barrels of oil equivalents (MMBoe) or 340 billion cubic feet equivalent (Bcfe). Over 95 MMBoe or 570 Bcfe of its estimated proved reserves are revised downward. It has made investments in seismic data and leasehold interests, and has geological, geophysical, engineering and operational operations in deep water arena to evaluate potential exploration, development and acquisition opportunities. It holds over two deep water platforms, producing reserves and various leases.

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