Centennial Resource Development (NASDAQ: CDEV) and QEP Resources (NYSE:QEP) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Institutional and Insider Ownership

93.5% of Centennial Resource Development shares are owned by institutional investors. Comparatively, 93.3% of QEP Resources shares are owned by institutional investors. 44.7% of Centennial Resource Development shares are owned by company insiders. Comparatively, 1.4% of QEP Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Centennial Resource Development and QEP Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centennial Resource Development 0 2 14 0 2.88
QEP Resources 1 5 10 1 2.65

Centennial Resource Development presently has a consensus price target of $22.71, indicating a potential upside of 20.63%. QEP Resources has a consensus price target of $13.93, indicating a potential upside of 64.70%. Given QEP Resources’ higher possible upside, analysts plainly believe QEP Resources is more favorable than Centennial Resource Development.

Risk & Volatility

Centennial Resource Development has a beta of 2, indicating that its stock price is 100% more volatile than the S&P 500. Comparatively, QEP Resources has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Valuation and Earnings

This table compares Centennial Resource Development and QEP Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Centennial Resource Development $98.83 million 52.57 -$226.80 million N/A N/A
QEP Resources $1.38 billion 1.48 -$1.25 billion ($0.06) -141.00

Centennial Resource Development has higher earnings, but lower revenue than QEP Resources.

Profitability

This table compares Centennial Resource Development and QEP Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Centennial Resource Development -49.20% -5.52% -5.19%
QEP Resources -0.90% -3.48% -1.72%

Summary

Centennial Resource Development beats QEP Resources on 7 of the 13 factors compared between the two stocks.

Centennial Resource Development Company Profile

Centennial Resource Development, Inc. is an independent oil and natural gas company. The Company is focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company’s assets are concentrated in the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of large, contiguous acreage blocks in Reeves, Ward and Pecos counties in West Texas. As of December 31, 2016, the Company held approximately 92% membership interest in Centennial Resource Production, LLC (CRP). As of December 31, 2016, its portfolio included 106 operated producing horizontal wells. The horizontal wells span an area of approximately 45 miles long by 20 miles wide where it had commercial production in five zones: the 3rd Bone Spring Sandstone, Upper Wolfcamp A, Lower Wolfcamp A, Wolfcamp B and Wolfcamp C.

QEP Resources Company Profile

QEP Resources, Inc. is an independent crude oil and natural gas exploration and production company. The Company focuses on two regions of the United States: the Northern Region (primarily in North Dakota, Wyoming and Utah) and the Southern Region (primarily in Texas and Louisiana). The Company conducts exploration and production activities in North America’s hydrocarbon resource plays. The Company has an inventory of developed and undeveloped drilling locations in the Permian Basin in western Texas, the Williston Basin in North Dakota, Haynesville/Cotton Valley in northwestern Louisiana, the Uinta Basin in eastern Utah and other properties in Wyoming, Utah and Colorado. It sells gas volumes to wholesale marketers, industrial users, local distribution companies and utilities. It sells oil and natural gas liquid (NGL) volumes to refiners, marketers and other companies.

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