Contrasting EP Energy (EPE) and Energen (NYSE:EGN)

EP Energy (NYSE: EPE) and Energen (NYSE:EGN) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Volatility & Risk

EP Energy has a beta of 4.45, indicating that its share price is 345% more volatile than the S&P 500. Comparatively, Energen has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.

Insider & Institutional Ownership

68.9% of EP Energy shares are owned by institutional investors. Comparatively, 96.1% of Energen shares are owned by institutional investors. 1.3% of EP Energy shares are owned by insiders. Comparatively, 1.0% of Energen shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for EP Energy and Energen, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EP Energy 7 5 1 0 1.54
Energen 1 10 11 0 2.45

EP Energy presently has a consensus target price of $3.60, indicating a potential upside of 45.16%. Energen has a consensus target price of $64.68, indicating a potential upside of 11.62%. Given EP Energy’s higher probable upside, research analysts clearly believe EP Energy is more favorable than Energen.

Earnings & Valuation

This table compares EP Energy and Energen’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EP Energy $767.00 million 0.83 -$27.00 million ($1.06) -2.34
Energen $532.89 million 10.57 -$167.51 million ($0.11) -526.82

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

Profitability

This table compares EP Energy and Energen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EP Energy -25.44% -8.50% -0.97%
Energen -1.17% -0.45% -0.30%

Summary

Energen beats EP Energy on 8 of the 14 factors compared between the two stocks.

About EP Energy

EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).

About Energen

Energen Corporation is an oil and natural gas exploration and production company. The Company is engaged in the exploration, development and production of oil and natural gas properties and natural gas. Its operations are conducted through subsidiary, Energen Resources Corporation and occur within the Midland Basin, the Delaware Basin and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico. The Company is focused on increasing its oil, natural gas liquids and natural gas production and proved reserves through active development and/or exploratory programs in the Permian Basin. As of December 31, 2016, oil, natural gas liquids and natural gas represented approximately 60%, 20% and 20% of its reserves. As of December 31, 2016, its development activities added approximately 327 million barrels of oil equivalent (MMBOE) of reserves from the drilling of 623 gross development, exploratory and service wells and 73 well recompletions and pay-adds.

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