Financial Contrast: Icahn Enterprises (NASDAQ:IEP) versus Diamondback Energy (NASDAQ:FANG)

Diamondback Energy (NASDAQ:FANG) and Icahn Enterprises (NASDAQ:IEP) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Profitability

This table compares Diamondback Energy and Icahn Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamondback Energy	11.03%	11.86%	7.31%
Icahn Enterprises	-9.25%	-20.22%	-3.71%

Volatility & Risk

Diamondback Energy has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Icahn Enterprises has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Dividends

Diamondback Energy pays an annual dividend of $4.40 per share and has a dividend yield of 2.5%. Icahn Enterprises pays an annual dividend of $2.00 per share and has a dividend yield of 42.1%. Diamondback Energy pays out 60.2% of its earnings in the form of a dividend. Icahn Enterprises pays out -129.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Diamondback Energy has raised its dividend for 7 consecutive years. Icahn Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

90.0% of Diamondback Energy shares are owned by institutional investors. Comparatively, 87.1% of Icahn Enterprises shares are owned by institutional investors. 0.6% of Diamondback Energy shares are owned by company insiders. Comparatively, 90.1% of Icahn Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Diamondback Energy and Icahn Enterprises”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamondback Energy	$15.03 billion	3.32	$1.66 billion	$7.31	24.48
Icahn Enterprises	$9.66 billion	0.37	-$299.00 million	($1.54)	-3.08

Diamondback Energy has higher revenue and earnings than Icahn Enterprises. Icahn Enterprises is trading at a lower price-to-earnings ratio than Diamondback Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Diamondback Energy and Icahn Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamondback Energy	0	4	24	3	2.97
Icahn Enterprises	1	0	0	0	1.00

Diamondback Energy presently has a consensus price target of $228.29, suggesting a potential upside of 27.56%. Given Diamondback Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Diamondback Energy is more favorable than Icahn Enterprises.

Summary

Diamondback Energy beats Icahn Enterprises on 14 of the 18 factors compared between the two stocks.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.

About Icahn Enterprises

Icahn Enterprises L.P., through its subsidiaries, engages in the investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The Investment segment invests its proprietary capital through various private investment funds. This segment provides investment advisory and other related services. The Energy segment refines and markets transportation fuels in the form of gasoline and diesel fuels, as well as renewable diesel; and manufactures nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The Automotive segment sells automotive parts and materials, and retailed merchandise; offers automotive repair and maintenance services; and leases real estate properties. The Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings that are used to prepare and package processed meat products. The Real Estate segment is involved in the leasing of land, retail, office, and industrial properties; the development and sale of single-family homes; and the operation of country clubs. The Home Fashion segment manufactures, sources, markets, distributes, and sells home fashion consumer products. The Pharma segment offers pharmaceutical products and services. The company was incorporated in 1987 and is headquartered in Sunny Isles Beach, Florida.