Marathon Oil (NYSE: MRO) and Matador Resources (NYSE:MTDR) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Marathon Oil and Matador Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marathon Oil $4.65 billion 2.77 -$2.14 billion ($8.32) -1.82
Matador Resources $264.42 million 11.32 -$97.42 million $1.96 14.09

Matador Resources has lower revenue, but higher earnings than Marathon Oil. Marathon Oil is trading at a lower price-to-earnings ratio than Matador Resources, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

80.7% of Marathon Oil shares are owned by institutional investors. Comparatively, 85.4% of Matador Resources shares are owned by institutional investors. 0.4% of Marathon Oil shares are owned by company insiders. Comparatively, 11.9% of Matador Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Marathon Oil pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Matador Resources does not pay a dividend. Marathon Oil pays out -2.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Marathon Oil and Matador Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marathon Oil 1 13 9 0 2.35
Matador Resources 0 5 12 0 2.71

Marathon Oil presently has a consensus target price of $16.87, suggesting a potential upside of 11.34%. Matador Resources has a consensus target price of $30.00, suggesting a potential upside of 8.66%. Given Marathon Oil’s higher possible upside, equities analysts clearly believe Marathon Oil is more favorable than Matador Resources.

Profitability

This table compares Marathon Oil and Matador Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marathon Oil -148.07% -3.02% -1.60%
Matador Resources 40.30% 5.99% 3.15%

Volatility and Risk

Marathon Oil has a beta of 2.39, suggesting that its stock price is 139% more volatile than the S&P 500. Comparatively, Matador Resources has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Summary

Matador Resources beats Marathon Oil on 10 of the 15 factors compared between the two stocks.

Marathon Oil Company Profile

Marathon Oil Corporation is an exploration and production (E&P) company. The Company operates through three segments: North America E&P, International E&P and Oil Sands Mining. The North America E&P segment explores for, produces and markets crude oil and condensate, natural gas liquids (NGLs) and natural gas in North America. The International E&P segment explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of North America, and produces and markets products manufactured from natural gas, such as liquefied natural gas (LNG) and methanol, in Equatorial Guinea (E.G.). The Oil Sands Mining segment mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.

Matador Resources Company Profile

Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s segments include exploration and production, and midstream. The Company’s operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, the Company conducts midstream operations primarily, as of February 17, 2017, through its midstream joint venture, San Mateo Midstream, LLC (San Mateo or the Joint Venture).

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