Head-To-Head Comparison: Concho Resources (CXO) versus EP Energy (EPE)

Concho Resources (NYSE: CXO) and EP Energy (NYSE:EPE) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Valuation & Earnings

This table compares Concho Resources and EP Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Concho Resources $1.63 billion 13.11 -$1.46 billion $3.80 37.92
EP Energy $767.00 million 0.61 -$27.00 million ($1.06) -1.73

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Concho Resources and EP Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Concho Resources 0 7 12 0 2.63
EP Energy 7 5 1 0 1.54

Concho Resources presently has a consensus target price of $167.89, suggesting a potential upside of 16.82%. EP Energy has a consensus target price of $3.25, suggesting a potential upside of 77.60%. Given EP Energy’s higher probable upside, analysts plainly believe EP Energy is more favorable than Concho Resources.

Profitability

This table compares Concho Resources and EP Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Concho Resources 24.19% 2.92% 1.87%
EP Energy -25.44% -8.50% -0.97%

Volatility and Risk

Concho Resources has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, EP Energy has a beta of 3.96, indicating that its share price is 296% more volatile than the S&P 500.

Insider & Institutional Ownership

94.6% of Concho Resources shares are held by institutional investors. Comparatively, 68.8% of EP Energy shares are held by institutional investors. 1.0% of Concho Resources shares are held by insiders. Comparatively, 1.3% of EP Energy shares are held by 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.

Summary

Concho Resources beats EP Energy on 9 of the 13 factors compared between the two stocks.

Concho Resources Company Profile

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company’s four operating areas include the Northern Delaware Basin, the Southern Delaware Basin, the Midland Basin and the New Mexico Shelf. As of December 31, 2016, the Company’s operations were focused in the Permian Basin, which underlies an area of Southeast New Mexico and West Texas approximately 250 miles wide and 300 miles long. The Permian Basin is an oil and natural gas producing region in the United States and is characterized by multiple producing horizons and enhanced recovery potential. As of December 31, 2016, the Company produced approximately 55.1 million barrels of oil equivalent (MMBoe) of oil and natural gas. As of December 31, 2016, all of its 720 MMBoe total estimated proved reserves were located in its core operating areas and consisted of approximately 59.5% oil and 40.5% natural gas.

EP Energy Company Profile

EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).

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