Evolution Petroleum Corp (NYSE: EPM) and Penn West Petroleum (NYSE:OBE) are both small-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Insider & Institutional Ownership
19.7% of Penn West Petroleum shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Evolution Petroleum Corp and Penn West Petroleum’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Evolution Petroleum Corp | 25.40% | 14.11% | 11.12% |
| Penn West Petroleum | -95.25% | -22.87% | -14.47% |
Earnings & Valuation
This table compares Evolution Petroleum Corp and Penn West Petroleum’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Evolution Petroleum Corp | $32.89 million | 7.90 | $18.80 million | N/A | N/A |
| Penn West Petroleum | N/A | N/A | N/A | ($0.85) | -1.39 |
Evolution Petroleum Corp has higher revenue and earnings than Penn West Petroleum.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Evolution Petroleum Corp and Penn West Petroleum, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Evolution Petroleum Corp | 0 | 1 | 3 | 0 | 2.75 |
| Penn West Petroleum | 0 | 7 | 1 | 0 | 2.13 |
Evolution Petroleum Corp currently has a consensus price target of $10.33, suggesting a potential upside of 29.98%. Penn West Petroleum has a consensus price target of $2.37, suggesting a potential upside of 100.85%. Given Penn West Petroleum’s higher possible upside, analysts plainly believe Penn West Petroleum is more favorable than Evolution Petroleum Corp.
Summary
Evolution Petroleum Corp beats Penn West Petroleum on 6 of the 8 factors compared between the two stocks.
About Evolution Petroleum Corp
Evolution Petroleum Corporation is an independent oil and gas company. The Company is engaged in the acquisition, exploitation and development of properties for the production of crude oil and natural gas, onshore in the United States. Its assets include interests in a carbon dioxide (CO2) enhanced oil recovery project (EOR) in Louisiana’s Delhi field. Its artificial lift technology is Gas Assisted Rod Pump (GARP). The Company tested GARP technology on marginal producing wells that it owns and operates in the Giddings Field. Its mineral interests include Delhi Holt-Bryant Unit in the Delhi field (Unit) located in Northeast Louisiana. As of June 30, 2016, the Unit was approximately 13,636 acres in size. As of June 30, 2016, the Unit produced approximately 195 million barrels of oil through primary and limited secondary recovery operations. As of June 30, 2016, the Unit had produced over 11 million barrels of oil. The Unit is producing as an EOR project utilizing CO2 flood technology.
About Penn West Petroleum
Obsidian Energy Ltd, formerly Penn West Petroleum Ltd, is a Canada-based conventional oil and natural gas producer and development and production company. The Company operates a portfolio of opportunities with an oil position in the Cardium, Viking and Peace River areas of Alberta. The Alberta Viking area offers a mix of light-oil and gas with high-netback shorter cycle wells to complement longer cycle activities in the Cardium. The Cardium is concentrated on the low-decline and high-netback light-oil production. The Company is focused on an integrated waterflood approach in which it maintain reservoir pressure from the start of production to reduce decline rates on new wells. The Peace River operates in a crude oil resource industry.
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