Analyzing Sanchez Energy Corporation (SN) and Laredo Petroleum (LPI)
Sanchez Energy Corporation (NYSE: SN) and Laredo Petroleum (NYSE:LPI) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.
This is a summary of recent ratings and recommmendations for Sanchez Energy Corporation and Laredo Petroleum, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sanchez Energy Corporation||1||7||6||0||2.36|
Sanchez Energy Corporation presently has a consensus price target of $10.92, indicating a potential upside of 170.21%. Laredo Petroleum has a consensus price target of $14.73, indicating a potential upside of 28.33%. Given Sanchez Energy Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Sanchez Energy Corporation is more favorable than Laredo Petroleum.
Volatility and Risk
Sanchez Energy Corporation has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.
Insider & Institutional Ownership
70.4% of Sanchez Energy Corporation shares are owned by institutional investors. 14.7% of Sanchez Energy Corporation shares are owned by company insiders. Comparatively, 1.4% of Laredo Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Sanchez Energy Corporation and Laredo Petroleum’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sanchez Energy Corporation||$550.09 million||0.56||$297.41 million||($0.33)||-12.24|
|Laredo Petroleum||$720.06 million||3.87||$195.80 million||$0.49||23.43|
Sanchez Energy Corporation has higher revenue, but lower earnings than Laredo Petroleum. Sanchez Energy Corporation is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.
This table compares Sanchez Energy Corporation and Laredo Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sanchez Energy Corporation||7.65%||N/A||-3.28%|
Laredo Petroleum beats Sanchez Energy Corporation on 7 of the 13 factors compared between the two stocks.
About Sanchez Energy Corporation
Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of the United States onshore unconventional oil and natural gas resources. The Company primarily focuses on the Eagle Ford Shale in South Texas. The Company also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2016, it had assembled approximately 278,000 net leasehold acres in the Eagle Ford Shale. As of December 31, 2016, it had 473 net wells in the Eagle Ford Shale area. In its Catarina area, the Company had approximately 106,000 net acres in Dimmit, LaSalle and Webb Counties, Texas, at December 31, 2016. In its Maverick area, it had approximately 100,000 net acres in Dimmit, Frio, LaSalle, Zavala and McMullen Counties, Texas, at December 31, 2016. In its Javelina area, it had approximately 39,500 net acres in LaSalle and Webb Counties, Texas, at December 31, 2016.
About Laredo Petroleum
Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.
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