EXCO Resources NL (NYSE: XCO) and Legacy Reserves (NASDAQ:LGCY) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.
Valuation and Earnings
This table compares EXCO Resources NL and Legacy Reserves’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EXCO Resources NL||$291.44 million||0.07||$31.55 million||$7.42||0.14|
|Legacy Reserves||$367.53 million||0.27||$160.94 million||($1.72)||-0.80|
Legacy Reserves has higher revenue and earnings than EXCO Resources NL. Legacy Reserves is trading at a lower price-to-earnings ratio than EXCO Resources NL, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
20.9% of Legacy Reserves shares are owned by institutional investors. 2.0% of EXCO Resources NL shares are owned by insiders. Comparatively, 10.2% of Legacy Reserves shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for EXCO Resources NL and Legacy Reserves, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EXCO Resources NL||0||0||0||0||N/A|
Legacy Reserves has a consensus price target of $1.88, suggesting a potential upside of 36.47%. Given Legacy Reserves’ higher possible upside, analysts plainly believe Legacy Reserves is more favorable than EXCO Resources NL.
Risk & Volatility
EXCO Resources NL has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Legacy Reserves has a beta of 2.46, meaning that its stock price is 146% more volatile than the S&P 500.
This table compares EXCO Resources NL and Legacy Reserves’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EXCO Resources NL||47.81%||N/A||-2.60%|
Legacy Reserves beats EXCO Resources NL on 8 of the 10 factors compared between the two stocks.
EXCO Resources NL Company Profile
EXCO Resources, Inc. (EXCO) is an oil and natural gas company. The Company is engaged in the exploration, exploitation, acquisition, development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The Company’s principal operations are conducted in certain United States oil and natural gas areas, including Texas, Louisiana and the Appalachia region. The Company holds acreage positions in approximately three shale plays in the United States, including East Texas and North Louisiana, South Texas and Appalachia. In East Texas and North Louisiana, the Company holds approximately 83,800 net acres in the Haynesville and Bossier shales. In South Texas, it holds approximately 65,800 net acres in the Eagle Ford shale. In Appalachia, the Company holds approximately 137,400 net acres prospective in the Marcellus shale.
Legacy Reserves Company Profile
Legacy Reserves LP (Legacy) is a master limited partnership company. The Company focuses on the acquisition and development of oil and natural gas properties located in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions of the United States. As of December 31, 2016, the Company had proved reserves of approximately 144.8 million barrels of crude oil equivalent (MMBoe), of which 72% were natural gas, 28% were oil and natural gas liquids (NGLs) and 94% were classified as proved developed producing. As of December 31, 2016, the Company owned interests in producing oil and natural gas properties in 627 fields in the Permian Basin, East Texas, Piceance Basin of Colorado, Texas Panhandle, Wyoming, North Dakota, Montana, Oklahoma and various other states, from 10,775 gross productive wells, of which 3,799 were operated and 6,976 were non-operated. The Company’s fields and regions include East Texas, Piceance Basin, Spraberry/War San, Lea, Texas Panhandle and Deep Rock.
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