Financial Comparison: Clayton Williams Energy (CWEI) & Marathon Oil (MRO)

Marathon Oil (NYSE: MRO) and Clayton Williams Energy (NYSE:CWEI) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Marathon Oil and Clayton Williams Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marathon Oil 1 11 10 0 2.41
Clayton Williams Energy 0 1 0 0 2.00

Marathon Oil presently has a consensus price target of $16.66, suggesting a potential upside of 10.98%. Given Marathon Oil’s stronger consensus rating and higher possible upside, analysts clearly believe Marathon Oil is more favorable than Clayton Williams Energy.

Volatility & Risk

Marathon Oil has a beta of 2.39, meaning that its share price is 139% more volatile than the S&P 500. Comparatively, Clayton Williams Energy has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500.

Institutional and Insider Ownership

80.7% of Marathon Oil shares are owned by institutional investors. Comparatively, 67.8% of Clayton Williams Energy shares are owned by institutional investors. 0.4% of Marathon Oil shares are owned by insiders. Comparatively, 36.4% of Clayton Williams Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

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

Profitability

This table compares Marathon Oil and Clayton Williams Energy’s 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%
Clayton Williams Energy -16.83% -63.50% -7.44%

Earnings and Valuation

This table compares Marathon Oil and Clayton Williams Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marathon Oil $4.65 billion 2.74 -$2.14 billion ($8.32) -1.80
Clayton Williams Energy N/A N/A N/A ($21.71) -6.08

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

Summary

Marathon Oil beats Clayton Williams Energy on 11 of the 13 factors compared between the two stocks.

About Marathon Oil

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.

About Clayton Williams Energy

Clayton Williams Energy, Inc. is an independent oil and gas company engaged in the exploration for and production of oil and natural gas primarily in its core area in Southern Reeves County, Texas. The Company operates through two segments: oil and gas exploration and production, and contract drilling services. The Company focuses on developmental drilling in prolific oil shale provinces. The Company has holdings in the oil shale plays in the United States, the Wolfcamp Shale in the Southern Delaware Basin of West Texas. Its exploration program consists of generating exploratory prospects, leasing the acreage related to these prospects, drilling exploratory wells on these prospects to determine if recoverable oil and gas reserves exist, drilling developmental wells on these prospects and producing and selling any resulting oil and gas production. The Permian Basin is a sedimentary basin in West Texas and Southeastern New Mexico.

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