Head to Head Review: Southwestern Energy (SWN) and Carrizo Oil & Gas (CRZO)

Southwestern Energy (NYSE: SWN) and Carrizo Oil & Gas (NASDAQ:CRZO) 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 earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares Southwestern Energy and Carrizo Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwestern Energy 25.51% 19.14% 4.79%
Carrizo Oil & Gas 9.10% 48.53% 6.21%



Institutional and Insider Ownership

86.3% of Southwestern Energy shares are owned by institutional investors. 0.7% of Southwestern Energy shares are owned by insiders. Comparatively, 5.4% of Carrizo Oil & Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Southwestern Energy and Carrizo Oil & Gas’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southwestern Energy $3.20 billion 0.97 $1.05 billion $0.44 12.07
Carrizo Oil & Gas $745.89 million 3.07 $87.11 million $1.43 19.48

Southwestern Energy has higher revenue and earnings than Carrizo Oil & Gas. Southwestern Energy is trading at a lower price-to-earnings ratio than Carrizo Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Southwestern Energy has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Carrizo Oil & Gas has a beta of 2.14, suggesting that its share price is 114% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Southwestern Energy and Carrizo Oil & Gas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwestern Energy 6 13 3 0 1.86
Carrizo Oil & Gas 0 9 11 0 2.55

Southwestern Energy currently has a consensus price target of $6.04, indicating a potential upside of 13.76%. Carrizo Oil & Gas has a consensus price target of $27.41, indicating a potential downside of 1.61%. Given Southwestern Energy’s higher possible upside, equities analysts plainly believe Southwestern Energy is more favorable than Carrizo Oil & Gas.

Summary

Carrizo Oil & Gas beats Southwestern Energy on 9 of the 14 factors compared between the two stocks.

Southwestern Energy Company Profile

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil in the United States. It operates through two segments, Exploration and Production, and Midstream. The company focuses on the Marcellus Shale, an unconventional natural gas reservoir covering approximately 191,226 net acres in Northeast Appalachia; Marcellus Shale, Utica, and Upper Devonian unconventional natural gas and oil reservoirs covering approximately 290,291 net acres in Southwest Appalachia; and the Fayetteville Shale, an unconventional natural gas reservoir covering approximately 917,842 net acres in Arkansas. It also holds interest in properties located in Colorado and Louisiana. In addition, the company engages in gathering, marketing, and transporting natural gas, oil, and natural gas liquids (NGLs). As of December 31, 2017, it had a pipeline of 2,045 miles and 16 miles in Louisiana in its gathering systems. The company's estimated proved natural gas, oil, and NGLs reserves comprise 14,775 billion cubic feet of natural gas equivalent (Bcfe); and 6,855 Bcfe of proved undeveloped reserves. Southwestern Energy Company was founded in 1929 and is headquartered in Spring, Texas.

Carrizo Oil & Gas Company Profile

Carrizo Oil & Gas, Inc., together with its subsidiaries, engages in the exploration, development, and production of crude oil, natural gas liquids, and gas from resource plays primarily in the United States. The company holds interests in oil and gas plays, including Eagle Ford Shale in South Texas; and the Delaware Basin in West Texas. As of December 31, 2017, it had proved oil and gas reserves of 261.7 million barrels of oil equivalent; and operated 563.7 net productive oil and gas wells. The company was founded in 1993 and is based in Houston, Texas.

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