Head-To-Head Review: Energy XXI Gulf Coast (EXXI) versus Concho Resources (CXO)

Energy XXI Gulf Coast (NASDAQ: EXXI) and Concho Resources (NYSE:CXO) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Profitability

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This table compares Energy XXI Gulf Coast and Concho Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy XXI Gulf Coast -65.49% -34.58% -11.00%
Concho Resources 36.97% 3.61% 2.32%

Analyst Recommendations

This is a summary of current ratings and target prices for Energy XXI Gulf Coast and Concho Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy XXI Gulf Coast 0 0 0 0 N/A
Concho Resources 0 6 14 0 2.70

Concho Resources has a consensus target price of $169.89, indicating a potential upside of 10.93%. Given Concho Resources’ higher probable upside, analysts clearly believe Concho Resources is more favorable than Energy XXI Gulf Coast.

Insider & Institutional Ownership

82.7% of Energy XXI Gulf Coast shares are owned by institutional investors. Comparatively, 95.7% of Concho Resources shares are owned by institutional investors. 0.1% of Energy XXI Gulf Coast shares are owned by insiders. Comparatively, 1.0% of Concho Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Energy XXI Gulf Coast and Concho Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy XXI Gulf Coast $511.64 million 0.25 -$341.01 million ($10.10) -0.38
Concho Resources $2.59 billion 8.83 $956.00 million $6.41 23.89

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

Summary

Concho Resources beats Energy XXI Gulf Coast on 11 of the 11 factors compared between the two stocks.

About Energy XXI Gulf Coast

Energy XXI Gulf Coast, Inc. (EGC) is an independent oil and natural gas development and production company which was focused on development drilling on the Company’s core properties. The Company’s properties are located in the United States Gulf of Mexico waters and the Gulf Coast onshore. The Company operates nine oilfields on the Gulf of Mexico Shelf. As of December 31, 2016, total proved reserves were 121.9 million barrels of oil equivalents (MMBOE) of which 78% were crude oil. The Company operated in 616 gross producing wells on 439,294 net developed acres, including interests in 57 producing fields. The Company’s projects include Main Pass Complex, West Delta, Ship Shoal, Grand Isle and South Timbalier. The Main Pass complex is located in approximately 100 feet of water near the mouth of the mississippi river. It includes Main Pass 61 field and Main Pass 73 field along with the Main Pass 296 and 311.

About Concho Resources

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company’s four operating areas include the Northern Delaware Basin, the Southern Delaware Basin, the Midland Basin and the New Mexico Shelf. As of December 31, 2016, the Company’s operations were focused in the Permian Basin, which underlies an area of Southeast New Mexico and West Texas approximately 250 miles wide and 300 miles long. The Permian Basin is an oil and natural gas producing region in the United States and is characterized by multiple producing horizons and enhanced recovery potential. As of December 31, 2016, the Company produced approximately 55.1 million barrels of oil equivalent (MMBoe) of oil and natural gas. As of December 31, 2016, all of its 720 MMBoe total estimated proved reserves were located in its core operating areas and consisted of approximately 59.5% oil and 40.5% natural gas.

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