Sanchez Energy (NYSE: SN) and Vermilion Energy (NYSE:VET) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.
Vermilion Energy pays an annual dividend of $2.07 per share and has a dividend yield of 6.5%. Sanchez Energy does not pay a dividend. Vermilion Energy pays out 544.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Sanchez Energy has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500. Comparatively, Vermilion Energy has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
This table compares Sanchez Energy and Vermilion Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Sanchez Energy and Vermilion Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sanchez Energy||$740.33 million||0.35||$43.19 million||($3.34)||-0.92|
|Vermilion Energy||$789.86 million||4.90||$48.02 million||$0.38||83.39|
Vermilion Energy has higher revenue and earnings than Sanchez Energy. Sanchez Energy is trading at a lower price-to-earnings ratio than Vermilion Energy, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
57.3% of Sanchez Energy shares are owned by institutional investors. Comparatively, 56.0% of Vermilion Energy shares are owned by institutional investors. 14.7% of Sanchez Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of current ratings for Sanchez Energy and Vermilion Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sanchez Energy currently has a consensus target price of $9.25, indicating a potential upside of 201.30%. Vermilion Energy has a consensus target price of $52.25, indicating a potential upside of 64.88%. Given Sanchez Energy’s higher possible upside, equities research analysts plainly believe Sanchez Energy is more favorable than Vermilion Energy.
Vermilion Energy beats Sanchez Energy on 11 of the 16 factors compared between the two stocks.
About Sanchez Energy
Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of the United States onshore unconventional oil and natural gas resources. The Company primarily focuses on the Eagle Ford Shale in South Texas. The Company also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2016, it had assembled approximately 278,000 net leasehold acres in the Eagle Ford Shale. As of December 31, 2016, it had 473 net wells in the Eagle Ford Shale area. In its Catarina area, the Company had approximately 106,000 net acres in Dimmit, LaSalle and Webb Counties, Texas, at December 31, 2016. In its Maverick area, it had approximately 100,000 net acres in Dimmit, Frio, LaSalle, Zavala and McMullen Counties, Texas, at December 31, 2016. In its Javelina area, it had approximately 39,500 net acres in LaSalle and Webb Counties, Texas, at December 31, 2016.
About Vermilion Energy
Vermilion Energy Inc. produces oil and gas, and focuses on the acquisition, development and optimization of producing properties in North America, the Europe and Australia. Its segments include Canada, which includes production and assets focused in West Pembina near Drayton Valley, Alberta and Northgate in southeast Saskatchewan; France, which produces oil in France; Netherlands, which produces onshore gas and interests include over 24 onshore licenses and two offshore licenses; Germany, which holds interest in a four partner consortium; Ireland, which includes a non-operating interest in the offshore Corrib gas field located approximately 83 kilometers off the northwest coast of Ireland; Australia, which holds an operated working interest in the Wandoo field located approximately 80 kilometers offshore on the northwest shelf of Australia; the United States, which has interests in approximately 97,200 net acres of land in the Powder River Basin of northeastern Wyoming, and Corporate.
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