Reviewing Continental Resources (CLR) and Carrizo Oil & Gas (CRZO)

Continental Resources (NYSE: CLR) and Carrizo Oil & Gas (NASDAQ:CRZO) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Continental Resources and Carrizo Oil & Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Continental Resources 0 7 18 0 2.72
Carrizo Oil & Gas 0 8 12 0 2.60

Continental Resources presently has a consensus price target of $50.54, suggesting a potential downside of 11.70%. Carrizo Oil & Gas has a consensus price target of $29.89, suggesting a potential upside of 25.53%. Given Carrizo Oil & Gas’ higher possible upside, analysts plainly believe Carrizo Oil & Gas is more favorable than Continental Resources.

Earnings & Valuation

This table compares Continental Resources and Carrizo Oil & Gas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Continental Resources $1.98 billion 10.85 -$399.67 million ($0.07) -817.71
Carrizo Oil & Gas $443.59 million 4.37 -$675.47 million $1.55 15.36

Continental Resources has higher revenue and earnings than Carrizo Oil & Gas. Continental Resources is trading at a lower price-to-earnings ratio than Carrizo Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

22.6% of Continental Resources shares are held by institutional investors. Comparatively, 100.0% of Carrizo Oil & Gas shares are held by institutional investors. 76.9% of Continental Resources shares are held by company insiders. Comparatively, 6.0% of Carrizo Oil & Gas shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Continental Resources and Carrizo Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Continental Resources -0.95% 0.23% 0.07%
Carrizo Oil & Gas 16.08% 58.37% 4.45%

Risk and Volatility

Continental Resources has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, Carrizo Oil & Gas has a beta of 2.18, meaning that its stock price is 118% more volatile than the S&P 500.

Summary

Carrizo Oil & Gas beats Continental Resources on 8 of the 14 factors compared between the two stocks.

About Continental Resources

Continental Resources, Inc. is a crude oil and natural gas company with properties in the North, South and East regions of the United States. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken and the Red River units. The South region includes properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province (SCOOP), Sooner Trend Anadarko Canadian Kingfisher (STACK), and Arkoma Woodford areas of Oklahoma. The East region is consists of undeveloped leasehold acreage east of the Mississippi River with no drilling or production operations. As of December 31, 2016, its estimated proved reserves were 1,275 million barrels of oil equivalent (MMBoe), with estimated proved developed reserves of 519 MMBoe. As of December 31, 2016, its average daily production from South region properties was 91,088 barrels of oil equivalent (Boe) per day.

About Carrizo Oil & Gas

Carrizo Oil & Gas, Inc. is an energy company. The Company is engaged in the exploration, development and production of oil and gas from resource plays located in the United States. Its operations are focused in proven, producing oil and gas plays in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Utica Shale in Ohio, the Niobrara Formation in Colorado, and the Marcellus Shale in Pennsylvania. As of December 31, 2016, the Company’s proved reserves of 200 million barrels of oil equivalent (MMBoe) were 64% crude oil, 12% natural gas liquids (NGLs) and 24% natural gas. As of December 31, 2016, it operated approximately 94% of the wells in Eagle Ford in which it held an interest. As of December 31, 2016, it held an average interest of approximately 85% in these operated wells. As of December 31, 2016, it owned leases covering approximately 309,200 gross (179,179 net) acres in the Eagle Ford, Niobrara, Utica and the Delaware Basin areas.

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