Cimarex Energy (NYSE:XEC) and Black Stone Minerals (NYSE:BSM) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.
Dividends
Cimarex Energy pays an annual dividend of $0.88 per share and has a dividend yield of 1.4%. Black Stone Minerals pays an annual dividend of $0.70 per share and has a dividend yield of 7.1%. Cimarex Energy pays out 19.7% of its earnings in the form of a dividend. Black Stone Minerals pays out 60.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cimarex Energy has raised its dividend for 3 consecutive years and Black Stone Minerals has raised its dividend for 1 consecutive years.
Valuation & Earnings
This table compares Cimarex Energy and Black Stone Minerals' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Cimarex Energy | $2.36 billion | 2.82 | $-124,620,000.00 | $4.46 | 14.53 |
| Black Stone Minerals | $487.82 million | 4.17 | $214.37 million | $1.16 | 8.47 |
Black Stone Minerals has lower revenue, but higher earnings than Cimarex Energy. Black Stone Minerals is trading at a lower price-to-earnings ratio than Cimarex Energy, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Cimarex Energy and Black Stone Minerals' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Cimarex Energy | -104.14% | 7.29% | 3.41% |
| Black Stone Minerals | 31.42% | 16.85% | 9.18% |
Insider & Institutional Ownership
91.5% of Cimarex Energy shares are held by institutional investors. Comparatively, 19.1% of Black Stone Minerals shares are held by institutional investors. 2.0% of Cimarex Energy shares are held by insiders. Comparatively, 24.6% of Black Stone Minerals 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 and Volatility
Cimarex Energy has a beta of 2.4, meaning that its share price is 140% more volatile than the S&P 500. Comparatively, Black Stone Minerals has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Cimarex Energy and Black Stone Minerals, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Cimarex Energy | 0 | 4 | 16 | 0 | 2.80 |
| Black Stone Minerals | 0 | 1 | 1 | 1 | 3.00 |
Cimarex Energy presently has a consensus target price of $52.75, suggesting a potential downside of 19.33%. Black Stone Minerals has a consensus target price of $10.50, suggesting a potential upside of 6.92%. Given Black Stone Minerals' stronger consensus rating and higher possible upside, analysts clearly believe Black Stone Minerals is more favorable than Cimarex Energy.
Summary
Black Stone Minerals beats Cimarex Energy on 11 of the 18 factors compared between the two stocks.
