Contrasting Diamondback Energy (FANG) & Total (TOT)

Diamondback Energy (NASDAQ: FANG) and Total (NYSE:TOT) are both large-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Diamondback Energy and Total’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamondback Energy 35.09% 10.53% 7.77%
Total 4.68% 9.48% 4.50%

Institutional and Insider Ownership

5.7% of Total shares are held by institutional investors. 0.6% of Diamondback Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Diamondback Energy and Total’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diamondback Energy $1.21 billion 10.65 $516.75 million $5.30 24.55
Total $171.49 billion 0.88 $8.63 billion $4.12 14.72

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

Analyst Recommendations

This is a summary of current recommendations for Diamondback Energy and Total, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamondback Energy 0 2 23 0 2.92
Total 1 6 9 1 2.59

Diamondback Energy presently has a consensus price target of $143.46, indicating a potential upside of 10.24%. Total has a consensus price target of $49.43, indicating a potential downside of 18.48%. Given Diamondback Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Diamondback Energy is more favorable than Total.

Dividends

Diamondback Energy pays an annual dividend of $0.50 per share and has a dividend yield of 0.4%. Total pays an annual dividend of $2.92 per share and has a dividend yield of 4.8%. Diamondback Energy pays out 9.4% of its earnings in the form of a dividend. Total pays out 70.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility and Risk

Diamondback Energy has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Total has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Summary

Diamondback Energy beats Total on 11 of the 16 factors compared between the two stocks.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of onshore oil and natural gas reserves in the Permian Basin in West Texas. Its activities are primarily focused on the Wolfcamp, Spraberry, Clearfork, Bone Spring, and Cline formations. As of December 31, 2017, the company's net acreage position was approximately 206,660 acres in the Permian Basin; and estimated proved oil and natural gas reserves were 335,352 thousand barrels of crude oil equivalent. It also held working interests in 1,166 gross producing wells, as well as royalty interests in 64 additional wells. In addition, the company, through its subsidiary, Viper Energy Partners LP, owns mineral interests in approximately 247,602 gross acres primarily in Midland County, Texas. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.

About Total

TOTAL S.A. operates as an integrated oil and gas company worldwide. The company operates through Exploration & Production; Gas, Renewables & Power; Refining & Chemicals; and Marketing & Services segments. The Exploration & Production segment engages in the exploration and production activities in approximately 50 countries, and produces oil or gas in approximately 30 countries. The Gas, Renewables & Power segment is involved in the production, liquefaction, and trading of natural gas; production and trading of electricity, liquefied natural gas(LNG), liquefied petroleum gas, and petcoke and sulfur; LNG regasification; and transportation and storage of natural gas. This segment also designs, manufactures and supplies photovoltaic cells and panels. The Refining & Chemicals segment refines petrochemicals, including olefins and aromatics; and polymer derivatives, such as polyethylene, polypropylene, polystyrene, and hydrocarbon resins, as well as engages in biomass conversion and elastomer processing. It is also involved in trading and shipping crude oil and petroleum products. The Marketing & Services segment supplies and markets petroleum products, including bulk fuel, aviation fuel, special fluids, LPG, bitumen, heavy fuels, and marine bunkers; produces and sells lubricants. It operates approximately 16,000 service stations. TOTAL S.A. also develops renewable energies with a focus on solar and biomass. As of December 31, 2016, the company had 11,475 Mboe of combined proved reserves of oil and gas. TOTAL S.A. was founded in 1924 and is headquartered in Courbevoie, France.

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