Critical Comparison: SM Energy (NYSE:SM) vs. Topaz Resources (OTCMKTS:TOPZ)

Topaz Resources (OTCMKTS:TOPZ) and SM Energy (NYSE:SM) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for Topaz Resources and SM Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Topaz Resources	0	0	0	0	0.00
SM Energy	1	7	3	1	2.33

SM Energy has a consensus price target of $35.91, suggesting a potential upside of 93.84%. Given SM Energy’s stronger consensus rating and higher probable upside, analysts plainly believe SM Energy is more favorable than Topaz Resources.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Topaz Resources	N/A	N/A	N/A
SM Energy	22.03%	16.67%	8.44%

Volatility and Risk

Topaz Resources has a beta of -1.19, indicating that its stock price is 219% less volatile than the S&P 500. Comparatively, SM Energy has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Insider & Institutional Ownership

94.6% of SM Energy shares are owned by institutional investors. 1.5% of SM Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Topaz Resources and SM Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Topaz Resources	N/A	N/A	N/A	N/A	N/A
SM Energy	$3.27 billion	0.65	$770.29 million	$6.34	2.92

SM Energy has higher revenue and earnings than Topaz Resources.

Summary

SM Energy beats Topaz Resources on 11 of the 11 factors compared between the two stocks.

About Topaz Resources

Topaz Resources, Inc. operates as an independent oil and gas company. It focuses on production, acquisition, and developmental drilling opportunities within proven producing areas of north, central, and west Texas. The company was formerly known as Kids Germ Defense Corp. and changed its name to Topaz Resources, Inc. in April 2010. Topaz Resources, Inc. was founded in 2009 and is headquartered in Denton, Texas.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.