Parsley Energy (NYSE: PE) and Nexen Energy (NYSE:NXY) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.
This table compares Parsley Energy and Nexen Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
80.2% of Parsley Energy shares are owned by institutional investors. 15.5% of Parsley Energy shares are owned 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.
Earnings and Valuation
This table compares Parsley Energy and Nexen Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Parsley Energy||$457.77 million||17.40||-$74.18 million||$0.08||316.79|
Nexen Energy has lower revenue, but higher earnings than Parsley Energy.
This is a summary of recent ratings and price targets for Parsley Energy and Nexen Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Parsley Energy presently has a consensus price target of $40.05, indicating a potential upside of 58.04%. Given Parsley Energy’s higher possible upside, research analysts clearly believe Parsley Energy is more favorable than Nexen Energy.
Parsley Energy beats Nexen Energy on 8 of the 8 factors compared between the two stocks.
About Parsley Energy
Parsley Energy, Inc. is a holding company. The Company is an independent oil and natural gas company. The Company focuses on the acquisition, development and exploitation of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and Southeastern New Mexico and includes three primary sub-areas: the Midland Basin, the Central Basin Platform and the Delaware Basin. The Company’s properties are primarily located in the Midland and Delaware Basins, where it focuses on horizontal development drilling and target various stacked pay intervals in the Spraberry, Wolfcamp, Upper Pennsylvanian (Cline) and Atoka shales. As of December 31, 2016, it had an average working interest of 87% in 166 gross (146.7 net) horizontal wells, of which 151 gross (132.4 net) are in the Midland Basin. As of December 31, 2016, the Company operated seven horizontal rigs and three vertical drilling rigs.
About Nexen Energy
Nexen Inc. (Nexen) is an independent global energy company. The Company’s conventional oil and gas assets consist of large acreage positions in select basins, including the United Kingdom North Sea, deep-water Gulf of Mexico and offshore West Africa. Nexen operates the Buzzard field and platform in the United Kingdom. In the Gulf of Mexico, the Company holds deep-water and shelf producing assets, as well as several undeveloped deep-water discoveries, including Appomattox, Vicksburg and Knotty Head. The Company is a leaseholder in the Gulf with access to deep-water drilling rigs. The deep-water Gulf of Mexico is near infrastructure and continental United States markets. Nexen’s oil sands investments include interests in the Long Lake project, the Syncrude joint venture and 656,000 undeveloped acres (gross) in the Athabasca oil sands in northern Alberta.
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