Critical Contrast: VAALCO Energy (NYSE:EGY) and Extraction Oil & Gas (NYSE:XOG)

VAALCO Energy (NYSE:EGY) and Extraction Oil & Gas (NASDAQ:XOG) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Profitability

This table compares VAALCO Energy and Extraction Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VAALCO Energy 98.98% 49.61% 27.22%
Extraction Oil & Gas 7.21% -2.57% -1.12%

Insider & Institutional Ownership

46.3% of VAALCO Energy shares are held by institutional investors. Comparatively, 99.5% of Extraction Oil & Gas shares are held by institutional investors. 4.8% of VAALCO Energy shares are held by insiders. Comparatively, 9.2% of Extraction Oil & Gas shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

VAALCO Energy has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Extraction Oil & Gas has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for VAALCO Energy and Extraction Oil & Gas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VAALCO Energy 0 0 0 0 N/A
Extraction Oil & Gas 1 8 5 0 2.29

Extraction Oil & Gas has a consensus price target of $11.92, indicating a potential upside of 175.21%. Given Extraction Oil & Gas’ higher probable upside, analysts clearly believe Extraction Oil & Gas is more favorable than VAALCO Energy.

Earnings and Valuation

This table compares VAALCO Energy and Extraction Oil & Gas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VAALCO Energy $104.94 million 0.95 $98.23 million N/A N/A
Extraction Oil & Gas $1.06 billion 0.66 $114.57 million ($0.10) -43.30

Extraction Oil & Gas has higher revenue and earnings than VAALCO Energy.

Summary

Extraction Oil & Gas beats VAALCO Energy on 7 of the 12 factors compared between the two stocks.

About VAALCO Energy

VAALCO Energy, Inc., an independent energy company, acquires, explores for, develops, and produces crude oil and natural gas. The company holds Etame production sharing contract related to the Etame Marin block located offshore the Republic of Gabon in West Africa. It also owns interests in an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was founded in 1984 and is headquartered in Houston, Texas.

About Extraction Oil & Gas

Extraction Oil & Gas, Inc., an independent oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquid reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg (DJ) Basin of Colorado. The company also engages in the construction and support of midstream assets to gather, process, and produce crude oil and gas. As of December 31, 2018, it had approximately 179,300 net acres of contiguous acreage blocks in the productive areas of the DJ Basin; held approximately 138,100 net acres outside of the Core DJ Basin; had estimated proved reserves of approximately 347.9MMBoe; and had 1,538 gross producing wells. The company was founded in 2012 and is headquartered in Denver, Colorado.

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