Magnolia Oil & Gas (NYSE:MGY) and Occidental Petroleum (NYSE:OXY) Critical Survey

Magnolia Oil & Gas (NYSE:MGY) and Occidental Petroleum (NYSE:OXY) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

72.2% of Magnolia Oil & Gas shares are owned by institutional investors. Comparatively, 78.5% of Occidental Petroleum shares are owned by institutional investors. 7.9% of Magnolia Oil & Gas shares are owned by insiders. Comparatively, 0.2% of Occidental Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Magnolia Oil & Gas and Occidental Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magnolia Oil & Gas 0 7 5 0 2.42
Occidental Petroleum 7 11 2 1 1.86

Magnolia Oil & Gas currently has a consensus price target of $11.63, suggesting a potential upside of 157.19%. Occidental Petroleum has a consensus price target of $38.06, suggesting a potential upside of 196.61%. Given Occidental Petroleum’s higher probable upside, analysts clearly believe Occidental Petroleum is more favorable than Magnolia Oil & Gas.

Earnings and Valuation

This table compares Magnolia Oil & Gas and Occidental Petroleum’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magnolia Oil & Gas $936.14 million 1.22 $50.20 million $0.30 15.07
Occidental Petroleum $21.23 billion 0.54 -$667.00 million $1.45 8.85

Magnolia Oil & Gas has higher earnings, but lower revenue than Occidental Petroleum. Occidental Petroleum is trading at a lower price-to-earnings ratio than Magnolia Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Magnolia Oil & Gas and Occidental Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magnolia Oil & Gas 5.36% 1.84% 1.45%
Occidental Petroleum -2.94% 4.82% 1.46%

Volatility and Risk

Magnolia Oil & Gas has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500. Comparatively, Occidental Petroleum has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Summary

Magnolia Oil & Gas beats Occidental Petroleum on 8 of the 15 factors compared between the two stocks.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corporation engages in the business of acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids reserves in the United States. The company has oil and natural gas properties located primarily in Karnes County and the Giddings Field in South Texas primarily comprising the Eagle Ford Shale and the Austin Chalk formation. As of December 31, 2018, its assets consisted of a total leasehold position of 455,964 net acres, including 16,841 net acres with 200 net producing wells in the Karnes County portion of the Eagle Ford Shale; and 439,123 net acres with 846 net producing wells in the Giddings Field of the Austin Chalk. The company is based in Houston, Texas.

About Occidental Petroleum

Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also trades around its assets consisting of transportation and storage capacity; and invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.

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