Concho Resources (NYSE:CXO) and Parsley Energy (NYSE:PE) are both mid-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
Institutional & Insider Ownership
93.8% of Concho Resources shares are owned by institutional investors. Comparatively, 68.4% of Parsley Energy shares are owned by institutional investors. 1.1% of Concho Resources shares are owned by insiders. Comparatively, 19.4% of Parsley Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Concho Resources and Parsley Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Concho Resources | -210.59% | 3.89% | 2.71% |
| Parsley Energy | -151.11% | 5.98% | 3.75% |
Dividends
Concho Resources pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. Parsley Energy pays an annual dividend of $0.20 per share and has a dividend yield of 1.9%. Concho Resources pays out 26.2% of its earnings in the form of a dividend. Parsley Energy pays out 17.9% 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. Parsley Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of recent ratings and target prices for Concho Resources and Parsley Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Concho Resources | 0 | 5 | 19 | 0 | 2.79 |
| Parsley Energy | 0 | 3 | 20 | 0 | 2.87 |
Concho Resources currently has a consensus price target of $86.3478, suggesting a potential upside of 81.56%. Parsley Energy has a consensus price target of $16.9130, suggesting a potential upside of 62.00%. Given Concho Resources' higher possible upside, equities research analysts clearly believe Concho Resources is more favorable than Parsley Energy.
Risk and Volatility
Concho Resources has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500. Comparatively, Parsley Energy has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500.
Earnings and Valuation
This table compares Concho Resources and Parsley Energy's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Concho Resources | $4.59 billion | 2.04 | $-705,000,000.00 | $3.05 | 15.59 |
| Parsley Energy | $1.96 billion | 2.20 | $175.21 million | $1.12 | 9.32 |
Parsley Energy has lower revenue, but higher earnings than Concho Resources. Parsley Energy is trading at a lower price-to-earnings ratio than Concho Resources, indicating that it is currently the more affordable of the two stocks.
Summary
Parsley Energy beats Concho Resources on 11 of the 16 factors compared between the two stocks.
