Critical Contrast: REX American Resources (NYSE:REX) vs. Epsilon Energy (NASDAQ:EPSN)

Epsilon Energy (NASDAQ:EPSN) and REX American Resources (NYSE:REX) are both small-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, risk, valuation, dividends and profitability.

Profitability

This table compares Epsilon Energy and REX American Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	-3.77%	5.56%	3.26%
REX American Resources	18.31%	16.90%	15.01%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Epsilon Energy and REX American Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	1	0	0	2.00
REX American Resources	0	0	1	0	3.00

Insider & Institutional Ownership

60.3% of Epsilon Energy shares are held by institutional investors. Comparatively, 88.1% of REX American Resources shares are held by institutional investors. 28.4% of Epsilon Energy shares are held by insiders. Comparatively, 13.2% of REX American Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Epsilon Energy and REX American Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$51.59 million	3.48	-$5.80 million	($0.21)	-28.24
REX American Resources	$650.49 million	2.18	$82.95 million	$3.65	11.73

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

Risk and Volatility

Epsilon Energy has a beta of -0.19, indicating that its share price is 119% less volatile than the S&P 500. Comparatively, REX American Resources has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Summary

REX American Resources beats Epsilon Energy on 11 of the 13 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.

About REX American Resources

REX American Resources Corporation, together with its subsidiaries, produces and sells ethanol in the United States. The company also offers corn, distillers grains, ethanol, distillers corn oil, gasoline, and natural gas. In addition, it provides dry distillers grains with solubles, which is used as a protein in animal feed. The company was formerly known as REX Stores Corporation and changed its name to REX American Resources Corporation in 2010. REX American Resources Corporation was founded in 1980 and is headquartered in Dayton, Ohio.