Approach Resources (NASDAQ: AREX) and Jones Energy (NYSE:JONE) are both small-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.
Valuation & Earnings
This table compares Approach Resources and Jones Energy’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Approach Resources||$105.35 million||2.31||-$112.35 million||($2.27)||-1.14|
|Jones Energy||$188.57 million||0.53||-$101.49 million||($1.46)||-0.67|
This table compares Approach Resources and Jones Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Approach Resources and Jones Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Approach Resources presently has a consensus target price of $2.80, suggesting a potential upside of 8.53%. Jones Energy has a consensus target price of $1.90, suggesting a potential upside of 94.27%. Given Jones Energy’s higher possible upside, analysts plainly believe Jones Energy is more favorable than Approach Resources.
Insider and Institutional Ownership
31.3% of Approach Resources shares are held by institutional investors. Comparatively, 61.2% of Jones Energy shares are held by institutional investors. 5.1% of Approach Resources shares are held by insiders. Comparatively, 37.2% of Jones Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk & Volatility
Approach Resources has a beta of 2.71, meaning that its stock price is 171% more volatile than the S&P 500. Comparatively, Jones Energy has a beta of 2.66, meaning that its stock price is 166% more volatile than the S&P 500.
Jones Energy beats Approach Resources on 10 of the 13 factors compared between the two stocks.
Approach Resources Company Profile
Approach Resources Inc. is an independent energy company. The Company is focused on the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater Permian Basin in West Texas. The Company’s business segment is the exploration and production of oil, natural gas liquids (NGLs) and natural gas. The Company’s assets cover an area of approximately 126,000 net acres. Its proved reserves are approximately 166.6 million barrels of oil equivalent. The Company’s proved reserves are primarily located in Crockett and Schleicher Counties, Texas. The Company’s Permian Basin acreage is known as the Project Pangea. The Company owns and operates approximately 800 producing oil and gas wells in the Permian Basin. The Company, through a joint venture with EnCana Oil & Gas (USA) Inc., holds interests in the approximately 3,000 gross acre project in Limestone and Robertson Counties, Texas, in the East Texas Cotton Valley trend.
Jones Energy Company Profile
Jones Energy, Inc. is an independent oil and gas company engaged in the exploration, development, production and acquisition of oil and natural gas properties. The Company’s assets are located within the Anadarko and Arkoma basins of Texas and Oklahoma. It owns leasehold interests in oil and natural gas producing properties, as well as in undeveloped acreage, located in the Anadarko and Arkoma basins in Texas and Oklahoma. The Company’s oil is generally sold under short-term, extendable and cancellable agreements with unaffiliated purchasers. The Company’s natural gas is sold at delivery points at or near producing wells to natural gas gathering and marketing companies. Its total estimated proved reserves are approximately 101.7 million barrels of oil equivalent (MMBoe). Approximately 25% of its total estimated proved reserves consist of oil, over 32% consist of natural gas liquids (NGLs) and over 43% consist of natural gas. Its properties include over 1,020 gross producing wells.
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