Falcon Minerals (NASDAQ:FLMN) and Enerplus (NYSE:ERF) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.
Institutional & Insider Ownership
31.8% of Falcon Minerals shares are held by institutional investors. Comparatively, 51.0% of Enerplus shares are held by institutional investors. 15.8% of Falcon Minerals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Falcon Minerals and Enerplus' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Falcon Minerals | 10.72% | 1.90% | 1.60% |
Enerplus | -130.21% | 2.91% | 1.54% |
Risk & Volatility
Falcon Minerals has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500. Comparatively, Enerplus has a beta of 3.18, meaning that its stock price is 218% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Falcon Minerals and Enerplus, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Falcon Minerals | 0 | 2 | 2 | 0 | 2.50 |
Enerplus | 0 | 2 | 9 | 0 | 2.82 |
Falcon Minerals presently has a consensus price target of $5.00, indicating a potential upside of 9.17%. Enerplus has a consensus price target of $7.9722, indicating a potential upside of 45.74%. Given Enerplus' stronger consensus rating and higher probable upside, analysts clearly believe Enerplus is more favorable than Falcon Minerals.
Dividends
Falcon Minerals pays an annual dividend of $0.30 per share and has a dividend yield of 6.6%. Enerplus pays an annual dividend of $0.07 per share and has a dividend yield of 1.3%. Falcon Minerals pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enerplus pays out 8.9% of its earnings in the form of a dividend. Falcon Minerals has raised its dividend for 1 consecutive years and Enerplus has raised its dividend for 1 consecutive years.
Valuation and Earnings
This table compares Falcon Minerals and Enerplus' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Falcon Minerals | $68.46 million | 5.76 | $14.35 million | $0.31 | 14.77 |
Enerplus | $945.62 million | 1.48 | $-195,730,000.00 | $0.79 | 6.92 |
Falcon Minerals has higher earnings, but lower revenue than Enerplus. Enerplus is trading at a lower price-to-earnings ratio than Falcon Minerals, indicating that it is currently the more affordable of the two stocks.
Summary
Enerplus beats Falcon Minerals on 9 of the 16 factors compared between the two stocks.