Denbury Resources (NYSE: DNR) and Jones Energy (NYSE:JONE) are both small-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
Volatility & Risk
Denbury Resources has a beta of 3.56, meaning that its stock price is 256% more volatile than the S&P 500. Comparatively, Jones Energy has a beta of 2.62, meaning that its stock price is 162% more volatile than the S&P 500.
80.2% of Denbury Resources shares are owned by institutional investors. Comparatively, 59.3% of Jones Energy shares are owned by institutional investors. 1.2% of Denbury Resources shares are owned by company insiders. Comparatively, 37.2% of Jones Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and price targets for Denbury Resources and Jones Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Denbury Resources presently has a consensus target price of $2.17, indicating a potential downside of 11.56%. Jones Energy has a consensus target price of $1.90, indicating a potential upside of 48.44%. Given Jones Energy’s higher possible upside, analysts clearly believe Jones Energy is more favorable than Denbury Resources.
Earnings and Valuation
This table compares Denbury Resources and Jones Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Denbury Resources||$975.60 million||1.01||-$976.17 million||($0.90)||-2.72|
|Jones Energy||$127.85 million||0.98||-$42.55 million||($2.65)||-0.48|
Jones Energy has lower revenue, but higher earnings than Denbury Resources. Denbury Resources is trading at a lower price-to-earnings ratio than Jones Energy, indicating that it is currently the more affordable of the two stocks.
This table compares Denbury Resources and Jones Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Denbury Resources beats Jones Energy on 10 of the 14 factors compared between the two stocks.
About Denbury Resources
Denbury Resources Inc. is an independent oil and natural gas company. The Company’s operations are focused in two operating areas: the Gulf Coast and Rocky Mountain regions. Its properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are situated in Montana, North Dakota and Wyoming. It had an estimated proved oil and natural gas reserves of 254.5 million barrels of oil equivalent (MMBOE) as of December 31, 2016. Its primary Gulf Coast carbon dioxide (CO2) source is Jackson Dome, which is located near Jackson, Mississippi. Its mature group of properties includes the initial CO2 field, Little Creek, and other fields, including Brookhaven, Cranfield, Eucutta, Lockhart Crossing, Mallalieu and Soso fields. Its LaBarge Field is located in southwestern Wyoming. Its Riley Ridge Federal Unit is located in southwestern Wyoming and produces gas from the same LaBarge Field.
About Jones Energy
Jones Energy, Inc. is an independent oil and gas company engaged in the exploration, development, production and acquisition of oil and natural gas properties. The Company’s assets are located within the Anadarko and Arkoma basins of Texas and Oklahoma. It owns leasehold interests in oil and natural gas producing properties, as well as in undeveloped acreage, located in the Anadarko and Arkoma basins in Texas and Oklahoma. The Company’s oil is generally sold under short-term, extendable and cancellable agreements with unaffiliated purchasers. The Company’s natural gas is sold at delivery points at or near producing wells to natural gas gathering and marketing companies. Its total estimated proved reserves are approximately 101.7 million barrels of oil equivalent (MMBoe). Approximately 25% of its total estimated proved reserves consist of oil, over 32% consist of natural gas liquids (NGLs) and over 43% consist of natural gas. Its properties include over 1,020 gross producing wells.
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