Analyzing Extraction Oil & Gas (OTCMKTS:XOGAQ) and Anadarko Petroleum (NASDAQ:APC)

Extraction Oil & Gas (OTCMKTS:XOGAQ) and Anadarko Petroleum (NASDAQ:APC) are both small-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

38.6% of Extraction Oil & Gas shares are owned by institutional investors. Comparatively, 85.2% of Anadarko Petroleum shares are owned by institutional investors. 6.0% of Extraction Oil & Gas shares are owned by insiders. Comparatively, 0.5% of Anadarko Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Extraction Oil & Gas and Anadarko Petroleum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extraction Oil & Gas	0	0	0	0	0.00
Anadarko Petroleum	1	1	3	2	2.86

Anadarko Petroleum has a consensus price target of $21.60, suggesting a potential upside of 9.64%. Given Anadarko Petroleum’s stronger consensus rating and higher possible upside, analysts clearly believe Anadarko Petroleum is more favorable than Extraction Oil & Gas.

Earnings & Valuation

This table compares Extraction Oil & Gas and Anadarko Petroleum”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extraction Oil & Gas	$906.64 million	0.01	-$1.39 billion	($0.46)	-0.13
Anadarko Petroleum	$5.58 billion	0.04	$615.00 million	$0.43	45.81

Anadarko Petroleum has higher revenue and earnings than Extraction Oil & Gas. Extraction Oil & Gas is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Extraction Oil & Gas and Anadarko Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extraction Oil & Gas	-223.86%	-56.20%	-11.52%
Anadarko Petroleum	-4.20%	10.49%	2.68%

Volatility & Risk

Extraction Oil & Gas has a beta of 2.1, indicating that its stock price is 110% more volatile than the S&P 500. Comparatively, Anadarko Petroleum has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Summary

Anadarko Petroleum beats Extraction Oil & Gas on 13 of the 15 factors compared between the two stocks.

About Extraction Oil & Gas

Extraction Oil & Gas, Inc., an independent oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquid reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg (DJ) Basin of Colorado. The company also engages in the construction and support of midstream assets to gather, process, and produce crude oil and gas. As of December 31, 2019, it had approximately 169,900 net acres of contiguous acreage blocks in the productive areas of the DJ Basin; held approximately 125,500 net acres outside of the Core DJ Basin; had estimated proved reserves of approximately 254.1 MMBoe; and had 1,509 gross producing wells. The company was founded in 2012 and is headquartered in Denver, Colorado. On June 14, 2020, Extraction Oil & Gas, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, Texas.