Blue Ridge Mountain Resources (OTCMKTS: MHRCQ) and Independence Contract Drilling (NYSE:ICD) are both small-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Profitability

This table compares Blue Ridge Mountain Resources and Independence Contract Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Blue Ridge Mountain Resources -2,141.83% N/A -174.34%
Independence Contract Drilling -34.87% -8.28% -6.78%

Analyst Ratings

This is a summary of current ratings and target prices for Blue Ridge Mountain Resources and Independence Contract Drilling, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Blue Ridge Mountain Resources 0 0 0 0 N/A
Independence Contract Drilling 0 1 5 0 2.83

Independence Contract Drilling has a consensus price target of $6.45, indicating a potential upside of 72.46%. Given Independence Contract Drilling’s higher possible upside, analysts clearly believe Independence Contract Drilling is more favorable than Blue Ridge Mountain Resources.

Valuation and Earnings

This table compares Blue Ridge Mountain Resources and Independence Contract Drilling’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Blue Ridge Mountain Resources N/A N/A N/A ($1.02) 0.00
Independence Contract Drilling $70.06 million 2.03 -$22.17 million ($0.78) -4.79

Blue Ridge Mountain Resources has higher earnings, but lower revenue than Independence Contract Drilling. Independence Contract Drilling is trading at a lower price-to-earnings ratio than Blue Ridge Mountain Resources, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

78.2% of Independence Contract Drilling shares are held by institutional investors. 11.8% of Independence Contract Drilling shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Blue Ridge Mountain Resources has a beta of 2.75, suggesting that its share price is 175% more volatile than the S&P 500. Comparatively, Independence Contract Drilling has a beta of 2.8, suggesting that its share price is 180% more volatile than the S&P 500.

Summary

Independence Contract Drilling beats Blue Ridge Mountain Resources on 9 of the 10 factors compared between the two stocks.

Blue Ridge Mountain Resources Company Profile

Blue Ridge Mountain Resources, Inc., formerly Magnum Hunter Resources Corporation, is an independent exploration and production company engaged in the acquisition, development and production of natural gas, natural gas liquids and crude oil, primarily in the states of West Virginia and Ohio. The Company operates through three segments: Upstream, Midstream and Oil Field Services. The Upstream segment is organized and operated to explore for and produce crude oil and natural gas within the geographic boundaries of the United States and Canada. The Midstream segment consists primarily of Eureka Hunter Holdings, LLC (Eureka Midstream Holdings), which markets natural gas and operates a network of pipelines and compression stations that gather natural gas and natural gas liquids (NGLs) in the United States for transportation to market. The Oilfield Services segment provides drilling services to oil and natural gas exploration and production companies.

Independence Contract Drilling Company Profile

Independence Contract Drilling, Inc. provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns, and operates a fleet of ShaleDriller rigs to optimize the development of various oil and gas properties in the Permian Basin. As of December 31, 2016, it had 12 rigs. The company was founded in 2011 and is headquartered in Houston, Texas.

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