Financial Review: Royale Energy (OTCMKTS:ROYL) & Matador Resources (NYSE:MTDR)

Matador Resources (NYSE:MTDR) and Royale Energy (OTCMKTS:ROYL) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

92.0% of Matador Resources shares are held by institutional investors. 6.1% of Matador Resources shares are held by company insiders. Comparatively, 61.8% of Royale Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Matador Resources and Royale Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matador Resources	27.45%	20.01%	10.67%
Royale Energy	-145.31%	N/A	N/A

Earnings & Valuation

This table compares Matador Resources and Royale Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matador Resources	$2.81 billion	2.56	$846.07 million	$7.55	7.62
Royale Energy	$2.16 million	1.47	-$1.83 million	($0.05)	-0.90

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

Volatility & Risk

Matador Resources has a beta of 3.22, suggesting that its share price is 222% more volatile than the S&P 500. Comparatively, Royale Energy has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Matador Resources and Royale Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matador Resources	0	1	13	0	2.93
Royale Energy	0	0	0	0	0.00

Matador Resources currently has a consensus target price of $75.14, indicating a potential upside of 30.67%. Given Matador Resources’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Matador Resources is more favorable than Royale Energy.

Summary

Matador Resources beats Royale Energy on 13 of the 14 factors compared between the two stocks.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.

About Royale Energy

Royale Energy, Inc. acquires, explores for, develops, produces, and sells oil and natural gas properties in the United States. Its principal operations are located in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana, and Colorado. Royale Energy, Inc. was incorporated in 1986 and is based in El Cajon, California.