Vermilion Energy (NYSE: VET) and Matador Resources (NYSE:MTDR) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Institutional & Insider Ownership

53.6% of Vermilion Energy shares are owned by institutional investors. Comparatively, 91.6% of Matador Resources shares are owned by institutional investors. 11.9% of Matador Resources shares are owned by 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 Vermilion Energy and Matador Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vermilion Energy $792.78 million 5.36 $513.13 million $0.47 74.60
Matador Resources $389.39 million 6.83 $258.23 million $1.94 13.65

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Vermilion Energy and Matador Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vermilion Energy 0 0 3 0 3.00
Matador Resources 0 6 11 0 2.65

Vermilion Energy currently has a consensus target price of $59.67, indicating a potential upside of 70.18%. Matador Resources has a consensus target price of $28.48, indicating a potential upside of 7.55%. Given Vermilion Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Vermilion Energy is more favorable than Matador Resources.

Volatility and Risk

Vermilion Energy has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Matador Resources has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Dividends

Vermilion Energy pays an annual dividend of $2.12 per share and has a dividend yield of 6.0%. Matador Resources does not pay a dividend. Vermilion Energy pays out 451.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Matador Resources has raised its dividend for 3 consecutive years.

Profitability

This table compares Vermilion Energy and Matador Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vermilion Energy 7.17% 4.52% 1.83%
Matador Resources 43.04% 5.45% 2.68%

Summary

Matador Resources beats Vermilion Energy on 11 of the 17 factors compared between the two stocks.

Vermilion Energy Company Profile

Vermilion Energy Inc. produces oil and gas, and focuses on the acquisition, development and optimization of producing properties in North America, the Europe and Australia. Its segments include Canada, which includes production and assets focused in West Pembina near Drayton Valley, Alberta and Northgate in southeast Saskatchewan; France, which produces oil in France; Netherlands, which produces onshore gas and interests include over 24 onshore licenses and two offshore licenses; Germany, which holds interest in a four partner consortium; Ireland, which includes a non-operating interest in the offshore Corrib gas field located approximately 83 kilometers off the northwest coast of Ireland; Australia, which holds an operated working interest in the Wandoo field located approximately 80 kilometers offshore on the northwest shelf of Australia; the United States, which has interests in approximately 97,200 net acres of land in the Powder River Basin of northeastern Wyoming, and Corporate.

Matador Resources Company Profile

Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s segments include exploration and production, and midstream. The Company’s operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, the Company conducts midstream operations primarily, as of February 17, 2017, through its midstream joint venture, San Mateo Midstream, LLC (San Mateo or the Joint Venture).

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