Legacy Reserves (NASDAQ: LGCY) is one of 228 public companies in the “Oil & Gas Exploration and Production” industry, but how does it contrast to its peers? We will compare Legacy Reserves to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.

Risk and Volatility

Legacy Reserves has a beta of 2.53, suggesting that its share price is 153% more volatile than the S&P 500. Comparatively, Legacy Reserves’ peers have a beta of 1.38, suggesting that their average share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Legacy Reserves and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Legacy Reserves 1 2 0 0 1.67
Legacy Reserves Competitors 1465 7646 12313 259 2.52

Legacy Reserves currently has a consensus price target of $1.88, indicating a potential upside of 27.25%. As a group, “Oil & Gas Exploration and Production” companies have a potential upside of 37.61%. Given Legacy Reserves’ peers stronger consensus rating and higher possible upside, analysts clearly believe Legacy Reserves has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Legacy Reserves and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Legacy Reserves $314.36 million -$55.82 million -0.69
Legacy Reserves Competitors $1.86 billion -$439.03 million -32.94

Legacy Reserves’ peers have higher revenue, but lower earnings than Legacy Reserves. Legacy Reserves is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

19.9% of Legacy Reserves shares are owned by institutional investors. Comparatively, 60.8% of shares of all “Oil & Gas Exploration and Production” companies are owned by institutional investors. 26.7% of Legacy Reserves shares are owned by company insiders. Comparatively, 12.2% of shares of all “Oil & Gas Exploration and Production” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Legacy Reserves and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Legacy Reserves -34.07% N/A -3.74%
Legacy Reserves Competitors -449.99% 20.83% 6.33%

Summary

Legacy Reserves peers beat Legacy Reserves on 8 of the 12 factors compared.

Legacy Reserves Company Profile

Legacy Reserves LP (Legacy) is a master limited partnership company. The Company focuses on the acquisition and development of oil and natural gas properties located in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions of the United States. As of December 31, 2016, the Company had proved reserves of approximately 144.8 million barrels of crude oil equivalent (MMBoe), of which 72% were natural gas, 28% were oil and natural gas liquids (NGLs) and 94% were classified as proved developed producing. As of December 31, 2016, the Company owned interests in producing oil and natural gas properties in 627 fields in the Permian Basin, East Texas, Piceance Basin of Colorado, Texas Panhandle, Wyoming, North Dakota, Montana, Oklahoma and various other states, from 10,775 gross productive wells, of which 3,799 were operated and 6,976 were non-operated. The Company’s fields and regions include East Texas, Piceance Basin, Spraberry/War San, Lea, Texas Panhandle and Deep Rock.

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