Rex Energy Corporation (REXX) versus Approach Resources (NASDAQ:AREX) Head-To-Head Survey

Rex Energy Corporation (NASDAQ: REXX) and Approach Resources (NASDAQ:AREX) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Profitability

This table compares Rex Energy Corporation and Approach Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rex Energy Corporation -37.94% -140.84% -4.04%
Approach Resources -169.54% -6.84% -3.47%

Institutional & Insider Ownership

14.7% of Rex Energy Corporation shares are owned by institutional investors. Comparatively, 24.3% of Approach Resources shares are owned by institutional investors. 7.9% of Rex Energy Corporation shares are owned by company insiders. Comparatively, 5.1% of Approach Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Rex Energy Corporation has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Approach Resources has a beta of 2.76, suggesting that its share price is 176% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Rex Energy Corporation and Approach Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rex Energy Corporation 0 3 0 0 2.00
Approach Resources 1 4 1 0 2.00

Rex Energy Corporation currently has a consensus target price of $6.68, indicating a potential upside of 255.19%. Approach Resources has a consensus target price of $2.80, indicating a potential upside of 21.21%. Given Rex Energy Corporation’s higher possible upside, analysts plainly believe Rex Energy Corporation is more favorable than Approach Resources.

Valuation & Earnings

This table compares Rex Energy Corporation and Approach Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rex Energy Corporation $181.60 million 0.10 $58.24 million ($7.23) -0.26
Approach Resources $101.58 million 1.96 $49.31 million ($2.64) -0.88

Rex Energy Corporation has higher revenue and earnings than Approach Resources. Approach Resources is trading at a lower price-to-earnings ratio than Rex Energy Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Approach Resources beats Rex Energy Corporation on 7 of the 12 factors compared between the two stocks.

Rex Energy Corporation Company Profile

Rex Energy Corporation is an independent oil, natural gas liquid (NGL) and natural gas company. The Company has operations in the Appalachian Basin and Illinois Basin. In the Appalachian Basin, the Company is focused on its Marcellus Shale, Utica Shale and Upper Devonian (Burkett) Shale drilling and exploration activities. In the Illinois Basin, the Company is focused on its developmental oil drilling on its properties. The Company owns an interest in approximately 1,820 oil and natural gas wells. The Company produces an average of over 195.8 net millions of cubic feet equivalent (MMcfe) per day, composed of approximately 62.4% natural gas, over 9.5% oil and approximately 28.1% NGLs. In the Illinois Basin, the Company produces an average of approximately 1,998 barrels of oil per day (bopd). Including both developed and undeveloped acreage, the Company controls approximately 99,200 gross (over 79,700 net) acres in Illinois, Indiana and Kentucky.

Approach Resources Company Profile

Approach Resources Inc. is an independent energy company. The Company is focused on the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater Permian Basin in West Texas. The Company’s business segment is the exploration and production of oil, natural gas liquids (NGLs) and natural gas. The Company’s assets cover an area of approximately 126,000 net acres. Its proved reserves are approximately 166.6 million barrels of oil equivalent. The Company’s proved reserves are primarily located in Crockett and Schleicher Counties, Texas. The Company’s Permian Basin acreage is known as the Project Pangea. The Company owns and operates approximately 800 producing oil and gas wells in the Permian Basin. The Company, through a joint venture with EnCana Oil & Gas (USA) Inc., holds interests in the approximately 3,000 gross acre project in Limestone and Robertson Counties, Texas, in the East Texas Cotton Valley trend.

Receive News & Ratings for Rex Energy Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Rex Energy Corporation and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply