Diamondback Energy (NASDAQ:FANG) and WPX Energy (NYSE:WPX) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
Profitability
This table compares Diamondback Energy and WPX Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Diamondback Energy | -135.48% | 5.10% | 3.06% |
| WPX Energy | -29.90% | 3.78% | 1.94% |
Valuation & Earnings
This table compares Diamondback Energy and WPX Energy's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Diamondback Energy | $3.96 billion | 2.76 | $240 million | $6.93 | 10.00 |
| WPX Energy | $2.29 billion | 2.31 | $256 million | $0.33 | 28.58 |
WPX Energy has lower revenue, but higher earnings than Diamondback Energy. Diamondback Energy is trading at a lower price-to-earnings ratio than WPX Energy, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
92.1% of Diamondback Energy shares are held by institutional investors. Comparatively, 97.5% of WPX Energy shares are held by institutional investors. 0.5% of Diamondback Energy shares are held by insiders. Comparatively, 1.3% of WPX Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and recommmendations for Diamondback Energy and WPX Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Diamondback Energy | 0 | 3 | 22 | 1 | 2.92 |
| WPX Energy | 0 | 8 | 12 | 0 | 2.60 |
Diamondback Energy currently has a consensus price target of $66.0893, indicating a potential downside of 4.61%. WPX Energy has a consensus price target of $8.2656, indicating a potential downside of 12.35%. Given Diamondback Energy's stronger consensus rating and higher possible upside, equities research analysts plainly believe Diamondback Energy is more favorable than WPX Energy.
Risk & Volatility
Diamondback Energy has a beta of 2.59, indicating that its share price is 159% more volatile than the S&P 500. Comparatively, WPX Energy has a beta of 3.4, indicating that its share price is 240% more volatile than the S&P 500.
Summary
Diamondback Energy beats WPX Energy on 10 of the 15 factors compared between the two stocks.
