EP Energy Corporation (NYSE: EPE) and Rex Energy Corporation (NASDAQ:REXX) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EP Energy Corporation $961.00 million 0.69 $611.00 million ($0.95) -2.75
Rex Energy Corporation $181.60 million 0.10 $58.24 million ($7.23) -0.26

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

Insider and Institutional Ownership

70.2% of EP Energy Corporation shares are owned by institutional investors. Comparatively, 14.5% of Rex Energy Corporation shares are owned by institutional investors. 1.3% of EP Energy Corporation shares are owned by insiders. Comparatively, 7.9% of Rex Energy Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
EP Energy Corporation N/A 1.30% 0.16%
Rex Energy Corporation -37.94% -140.84% -4.04%

Analyst Recommendations

This is a summary of recent ratings and price targets for EP Energy Corporation and Rex Energy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EP Energy Corporation 6 5 0 0 1.45
Rex Energy Corporation 0 3 0 0 2.00

EP Energy Corporation currently has a consensus price target of $3.67, suggesting a potential upside of 40.49%. Rex Energy Corporation has a consensus price target of $6.68, suggesting a potential upside of 255.19%. Given Rex Energy Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Rex Energy Corporation is more favorable than EP Energy Corporation.

Risk and Volatility

EP Energy Corporation has a beta of 4.79, suggesting that its stock price is 379% more volatile than the S&P 500. Comparatively, Rex Energy Corporation has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500.

Summary

EP Energy Corporation beats Rex Energy Corporation on 9 of the 12 factors compared between the two stocks.

EP Energy Corporation Company Profile

EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).

Rex Energy Corporation Company Profile

Rex Energy Corporation is an independent oil, natural gas liquid (NGL) and natural gas company. The Company has operations in the Appalachian Basin and Illinois Basin. In the Appalachian Basin, the Company is focused on its Marcellus Shale, Utica Shale and Upper Devonian (Burkett) Shale drilling and exploration activities. In the Illinois Basin, the Company is focused on its developmental oil drilling on its properties. The Company owns an interest in approximately 1,820 oil and natural gas wells. The Company produces an average of over 195.8 net millions of cubic feet equivalent (MMcfe) per day, composed of approximately 62.4% natural gas, over 9.5% oil and approximately 28.1% NGLs. In the Illinois Basin, the Company produces an average of approximately 1,998 barrels of oil per day (bopd). Including both developed and undeveloped acreage, the Company controls approximately 99,200 gross (over 79,700 net) acres in Illinois, Indiana and Kentucky.

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