W&T Offshore (NYSE: WTI) and Sanchez Energy Corporation (NYSE:SN) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, valuation, earnings, risk and institutional ownership.
Volatility and Risk
W&T Offshore has a beta of 2.41, indicating that its stock price is 141% more volatile than the S&P 500. Comparatively, Sanchez Energy Corporation has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.
Profitability
This table compares W&T Offshore and Sanchez Energy Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| W&T Offshore | -7.66% | N/A | -3.17% |
| Sanchez Energy Corporation | -38.54% | N/A | -4.32% |
Insider and Institutional Ownership
46.0% of W&T Offshore shares are held by institutional investors. Comparatively, 75.7% of Sanchez Energy Corporation shares are held by institutional investors. 32.6% of W&T Offshore shares are held by company insiders. Comparatively, 14.7% of Sanchez Energy Corporation shares are held by company insiders. 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.
Analyst Recommendations
This is a breakdown of current ratings and target prices for W&T Offshore and Sanchez Energy Corporation, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| W&T Offshore | 1 | 2 | 0 | 0 | 1.67 |
| Sanchez Energy Corporation | 2 | 3 | 7 | 0 | 2.42 |
W&T Offshore currently has a consensus target price of $2.63, indicating a potential upside of 34.62%. Sanchez Energy Corporation has a consensus target price of $12.86, indicating a potential upside of 136.46%. Given Sanchez Energy Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Sanchez Energy Corporation is more favorable than W&T Offshore.
Valuation and Earnings
This table compares W&T Offshore and Sanchez Energy Corporation’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| W&T Offshore | $444.79 million | 0.60 | $214.61 million | ($0.81) | -2.41 |
| Sanchez Energy Corporation | $485.35 million | 0.85 | $140.15 million | ($3.84) | -1.42 |
W&T Offshore has higher revenue, but lower earnings than Sanchez Energy Corporation. W&T Offshore is trading at a lower price-to-earnings ratio than Sanchez Energy Corporation, indicating that it is currently the more affordable of the two stocks.
W&T Offshore Company Profile
W&T Offshore, Inc. is an independent oil and natural gas producer. The Company is engaged in the exploration, development and acquisition of oil and natural gas properties in the Gulf of Mexico. As of December 31, 2016, the Company had interests in offshore leases covering approximately 750,000 gross acres (450,000 net acres) spanning across the Outer Continental Shelf (OCS) off the coasts of Louisiana, Texas, Mississippi and Alabama. Its producing fields are located in federal and state waters in the Gulf of Mexico in water depths ranging from less than 10 feet up to 7,300 feet. Its fields include Ship Shoal 349 Field (Mahogany), Fairway Field, Viosca Knoll 783 Field (Viosca Knoll 783 (Tahoe) and Viosca Knoll 784 (SE Tahoe)), Mississippi Canyon 782 Field (Dantzler), Mississippi Canyon 698 Field (Big Bend), Mississippi Canyon 243 Field (Matterhorn), Ewing Bank 910, Brazos A-133 Field and Viosca Knoll 823 Field (Virgo).
Sanchez Energy Corporation Company Profile
Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of the United States onshore unconventional oil and natural gas resources. The Company primarily focuses on the Eagle Ford Shale in South Texas. The Company also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2016, it had assembled approximately 278,000 net leasehold acres in the Eagle Ford Shale. As of December 31, 2016, it had 473 net wells in the Eagle Ford Shale area. In its Catarina area, the Company had approximately 106,000 net acres in Dimmit, LaSalle and Webb Counties, Texas, at December 31, 2016. In its Maverick area, it had approximately 100,000 net acres in Dimmit, Frio, LaSalle, Zavala and McMullen Counties, Texas, at December 31, 2016. In its Javelina area, it had approximately 39,500 net acres in LaSalle and Webb Counties, Texas, at December 31, 2016.
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