Head-To-Head Contrast: EP Energy (EPE) & Abraxas Petroleum (NASDAQ:AXAS)

EP Energy (NYSE: EPE) and Abraxas Petroleum (NASDAQ:AXAS) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.

Risk and Volatility

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EP Energy has a beta of 3.96, suggesting that its share price is 296% more volatile than the S&P 500. Comparatively, Abraxas Petroleum has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares EP Energy and Abraxas Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EP Energy -18.20% -19.42% -1.99%
Abraxas Petroleum 18.56% 19.32% 9.62%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for EP Energy and Abraxas Petroleum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EP Energy 7 7 1 0 1.60
Abraxas Petroleum 0 0 4 0 3.00

EP Energy currently has a consensus price target of $2.88, suggesting a potential upside of 114.55%. Abraxas Petroleum has a consensus price target of $3.30, suggesting a potential upside of 48.65%. Given EP Energy’s higher possible upside, research analysts plainly believe EP Energy is more favorable than Abraxas Petroleum.

Valuation & Earnings

This table compares EP Energy and Abraxas Petroleum’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EP Energy $1.07 billion 0.32 -$194.00 million ($0.78) -1.72
Abraxas Petroleum $86.26 million 4.27 $16.00 million $0.11 20.18

Abraxas Petroleum has lower revenue, but higher earnings than EP Energy. EP Energy is trading at a lower price-to-earnings ratio than Abraxas Petroleum, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

70.0% of EP Energy shares are held by institutional investors. Comparatively, 51.9% of Abraxas Petroleum shares are held by institutional investors. 1.3% of EP Energy shares are held by insiders. Comparatively, 8.5% of Abraxas Petroleum shares are held 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.

Summary

Abraxas Petroleum beats EP Energy on 10 of the 14 factors compared between the two stocks.

EP Energy Company Profile

EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).

Abraxas Petroleum Company Profile

Abraxas Petroleum Corporation is an independent energy company. The Company is engaged in the acquisition, exploration, development and production of oil and gas. As of December 31, 2016, the Company’s estimated net proved reserves were 44.7 million barrels of oil equivalent (MMBoe), of which 33.6% were classified as proved developed, 74% were oil and natural gas liquids (NGL), and 95% of which (on a PV-10 basis) were operated by the Company. As of December 31, 2016, the Company’s daily net production was 6,181 barrels of oil equivalent per day (Boepd), of which 61% was oil or liquids. The Company’s oil and gas assets are located in three operating regions: the Rocky Mountain, Permian Basin and onshore Gulf Coast. The Company’s properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana, and in the Green River Powder River and Unita Basins of Wyoming and Utah.

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