TransGlobe Energy (NASDAQ:TGA) and Falcon Minerals (NASDAQ:FLMN) 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 profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
Institutional and Insider Ownership
26.2% of TransGlobe Energy shares are held by institutional investors. Comparatively, 31.8% of Falcon Minerals shares are held by institutional investors. 4.0% of TransGlobe Energy shares are held by company insiders. Comparatively, 15.8% of Falcon Minerals shares are held by company 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.
Analyst Recommendations
This is a summary of recent recommendations for TransGlobe Energy and Falcon Minerals, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| TransGlobe Energy | 0 | 0 | 1 | 0 | 3.00 |
| Falcon Minerals | 0 | 3 | 2 | 0 | 2.40 |
Falcon Minerals has a consensus target price of $4.00, indicating a potential upside of 1.27%. Given Falcon Minerals' higher probable upside, analysts clearly believe Falcon Minerals is more favorable than TransGlobe Energy.
Profitability
This table compares TransGlobe Energy and Falcon Minerals' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| TransGlobe Energy | -47.93% | -17.29% | -11.53% |
| Falcon Minerals | 10.72% | 1.90% | 1.60% |
Valuation & Earnings
This table compares TransGlobe Energy and Falcon Minerals' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| TransGlobe Energy | $278.93 million | 0.38 | $-3,990,000.00 | N/A | N/A |
| Falcon Minerals | $68.46 million | 4.97 | $14.35 million | $0.31 | 12.74 |
Falcon Minerals has lower revenue, but higher earnings than TransGlobe Energy.
Dividends
TransGlobe Energy pays an annual dividend of $0.07 per share and has a dividend yield of 4.8%. Falcon Minerals pays an annual dividend of $0.30 per share and has a dividend yield of 7.6%. 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. Falcon Minerals has increased its dividend for 1 consecutive years. Falcon Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
TransGlobe Energy has a beta of 2.97, indicating that its share price is 197% more volatile than the S&P 500. Comparatively, Falcon Minerals has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.
Summary
Falcon Minerals beats TransGlobe Energy on 12 of the 16 factors compared between the two stocks.
