Critical Comparison: Bonanza Creek Energy (BCEI) versus Cardinal Energy Group (CEGX)

Cardinal Energy Group (OTCMKTS: CEGX) and Bonanza Creek Energy (NYSE:BCEI) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Insider & Institutional Ownership

91.0% of Bonanza Creek Energy shares are held by institutional investors. 11.3% of Cardinal Energy Group shares are held by company insiders. Comparatively, 0.6% of Bonanza Creek Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Cardinal Energy Group and Bonanza Creek Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cardinal Energy Group N/A N/A N/A ($0.15) -0.01
Bonanza Creek Energy $195.29 million 2.93 -$198.95 million ($153.96) -0.18

Cardinal Energy Group has higher earnings, but lower revenue than Bonanza Creek Energy. Bonanza Creek Energy is trading at a lower price-to-earnings ratio than Cardinal Energy Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Cardinal Energy Group and Bonanza Creek Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cardinal Energy Group 0 0 0 0 N/A
Bonanza Creek Energy 0 3 0 0 2.00

Bonanza Creek Energy has a consensus target price of $25.00, suggesting a potential downside of 10.68%. Given Bonanza Creek Energy’s higher probable upside, analysts clearly believe Bonanza Creek Energy is more favorable than Cardinal Energy Group.

Profitability

This table compares Cardinal Energy Group and Bonanza Creek Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cardinal Energy Group N/A N/A N/A
Bonanza Creek Energy -33.79% -3.17% -1.09%

Volatility & Risk

Cardinal Energy Group has a beta of -1.24, indicating that its share price is 224% less volatile than the S&P 500. Comparatively, Bonanza Creek Energy has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500.

Summary

Cardinal Energy Group beats Bonanza Creek Energy on 5 of the 9 factors compared between the two stocks.

About Cardinal Energy Group

Cardinal Energy Group, Inc. is engaged in the business of acquiring, developing and operating oil and gas leases. These operations are primarily focused on properties in which it holds a leasehold interest. The Company owns interests in oil and gas leases located in the north-central section of Texas. It holds approximately 85% working interest in the Dawson-Conway leases located in Shackelford County, Texas. The property consists of approximately 41 wells on over 618 acres. It holds approximately 100% working interest in the Powers-Sanders lease located in Shackelford County, Texas. The property consists of approximately 385 acres and over five producing oil wells. It holds approximately 100% working interest in the Stroebel-Broyles leases located in Eastland County, Texas. It holds approximately 43.75% working interest in the Fortune prospect located in Shackelford County, Texas. It holds over 100% working interest in the Bradford West lease.

About Bonanza Creek Energy

Bonanza Creek Energy, Inc. (Bonanza Creek) is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and the Dorcheat Macedonia Field in southern Arkansas. In addition, the Company owns and operates oil-producing assets in the North Park Basin in Colorado and the McKamie Patton Field in southern Arkansas. The main areas in which the Company operates in the Rocky Mountain region are the Wattenberg Field in Weld County, Colorado and the North Park Basin in Jackson County, Colorado. Its Wattenberg Field operations are in the oil and liquids-weighted extension area of the Wattenberg Field targeting the Niobrara and Codell formations. In southern Arkansas, it targets the oil-rich Cotton Valley sands in the Dorcheat Macedonia and McKamie Patton Fields.

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