Midstates Petroleum (MPO) versus Penn Virginia (PVAC) Critical Review

Midstates Petroleum (NYSE:MPO) and Penn Virginia (NASDAQ:PVAC) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Profitability

This table compares Midstates Petroleum and Penn Virginia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Midstates Petroleum -59.15% 2.00% 1.51%
Penn Virginia -3.23% 36.88% 11.81%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Midstates Petroleum and Penn Virginia, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Midstates Petroleum 0 1 0 0 2.00
Penn Virginia 0 0 3 0 3.00

Penn Virginia has a consensus target price of $93.67, indicating a potential upside of 25.54%. Given Penn Virginia’s stronger consensus rating and higher possible upside, analysts plainly believe Penn Virginia is more favorable than Midstates Petroleum.

Institutional & Insider Ownership

98.2% of Midstates Petroleum shares are held by institutional investors. Comparatively, 97.9% of Penn Virginia shares are held by institutional investors. 1.8% of Midstates Petroleum shares are held by insiders. Comparatively, 0.4% of Penn Virginia shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Midstates Petroleum and Penn Virginia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Midstates Petroleum $228.75 million 0.91 -$85.07 million N/A N/A
Penn Virginia $160.05 million 7.02 $32.66 million $2.88 25.91

Penn Virginia has lower revenue, but higher earnings than Midstates Petroleum.

Risk and Volatility

Midstates Petroleum has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Penn Virginia has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Summary

Penn Virginia beats Midstates Petroleum on 10 of the 13 factors compared between the two stocks.

About Midstates Petroleum

Midstates Petroleum Co., Inc. is an exploration and production company, which engages in the application of modern drilling and completion techniques in oil and liquids-rich basins. It focuses on its operations in the Mississippian Lime and the Anadarko Basin. The company was founded in 1993 and is headquartered in Houston, TX.

About Penn Virginia

Penn Virginia Corporation, an independent oil and gas company, engages in the onshore exploration, development, and production of crude oil, natural gas liquids, and natural gas in the United States. It primarily operates wells in the Eagle Ford Shale field in South Texas. The company also has operations in the Granite Wash in Oklahoma. As of December 31, 2017, it had total proved reserves of approximately 73 million barrels of oil equivalent; and 500 gross productive wells, as well as owned approximately 124,000 gross acres of leasehold and royalty interests. Penn Virginia Corporation was founded in 1882 and is headquartered in Houston, Texas.

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