VAALCO Energy (NYSE: EGY) and TransGlobe Energy (NASDAQ:TGA) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Risk & Volatility

VAALCO Energy has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, TransGlobe Energy has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for VAALCO Energy and TransGlobe Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VAALCO Energy 0 1 0 0 2.00
TransGlobe Energy 0 1 0 0 2.00

VAALCO Energy currently has a consensus target price of $2.00, indicating a potential upside of 135.29%. Given VAALCO Energy’s higher probable upside, research analysts plainly believe VAALCO Energy is more favorable than TransGlobe Energy.

Institutional & Insider Ownership

38.0% of VAALCO Energy shares are owned by institutional investors. Comparatively, 22.4% of TransGlobe Energy shares are owned by institutional investors. 2.6% of VAALCO Energy shares are owned by company insiders. Comparatively, 4.0% of TransGlobe Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares VAALCO Energy and TransGlobe Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VAALCO Energy $59.78 million 0.84 -$26.55 million $0.04 21.25
TransGlobe Energy $122.36 million 0.86 -$87.66 million ($1.54) -0.95

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

Profitability

This table compares VAALCO Energy and TransGlobe Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VAALCO Energy 3.43% 77.99% 4.27%
TransGlobe Energy -83.42% -7.08% -4.70%

Summary

VAALCO Energy beats TransGlobe Energy on 8 of the 12 factors compared between the two stocks.

VAALCO Energy Company Profile

VAALCO Energy, Inc. is an independent energy company. The Company is engaged in the acquisition, exploration, development and production of crude oil and natural gas. Its segments include Gabon, Angola, Equatorial Guinea, the United States, and Corporate and other, which includes corporate and operations support. It owns producing properties and conducts exploration activities as an operator in Gabon, West Africa; conducts exploration activities as an operator in Angola, West Africa, and participates in exploration and development activities as a non-operator in Equatorial Guinea, West Africa. In the United States, it operates unconventional resource properties in North Texas and hold undeveloped leasehold acreage in Montana. It also owns minor interests in conventional production activities as a non-operator in the United States. Its Etame Marin block is located offshore the Republic of Gabon. It owns over 640-acre lease in the Hefley field (Granite Wash formation) in North Texas.

TransGlobe Energy Company Profile

TransGlobe Energy Corporation is an oil exploration and production company. The Company’s activities are concentrated in the Arab Republic of Egypt (Egypt). The Company conducts its operations through the Arab Republic of Egypt segment. The Company is primarily engaged in oil exploration, development, production and the acquisition of properties. It holds interests in various production sharing concessions (PSC) in Eastern Desert Egypt and Western Desert Egypt. Its blocks in Eastern Desert Egypt include West Gharib, which covers approximately 34,860 acres; West Bakr, covering over 11,600 acres; North West (NW) Gharib, covering approximately 162,000 acres; South East (SE) Gharib, which covers over 125,650 acres, and South West (SW) Gharib, covering approximately 48,310 acres. Its blocks in the Western Desert Egypt include South Alamein, covering approximately 335,830 acres; South Ghazalat, covering over 465,300 acres, and North West (NW) Sitra, covering approximately 480,850 acres.

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