Financial Comparison: Apache (APA) vs. Earthstone Energy (ESTE)

Earthstone Energy (NYSE:ESTE) and Apache (NYSE:APA) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Dividends

Apache pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Earthstone Energy does not pay a dividend. Apache pays out 416.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

75.7% of Earthstone Energy shares are held by institutional investors. Comparatively, 96.7% of Apache shares are held by institutional investors. 64.4% of Earthstone Energy shares are held by insiders. Comparatively, 0.6% of Apache shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Earthstone Energy and Apache’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Earthstone Energy 6.79% 2.47% 2.12%
Apache 12.57% 5.21% 2.09%

Analyst Ratings

This is a summary of current ratings and recommmendations for Earthstone Energy and Apache, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Earthstone Energy 0 0 9 0 3.00
Apache 5 10 4 0 1.95

Earthstone Energy presently has a consensus price target of $13.88, indicating a potential upside of 54.85%. Apache has a consensus price target of $46.41, indicating a potential upside of 2.84%. Given Earthstone Energy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Earthstone Energy is more favorable than Apache.

Risk and Volatility

Earthstone Energy has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Apache has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares Earthstone Energy and Apache’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Earthstone Energy $108.08 million 5.30 -$12.51 million $1.43 6.27
Apache $6.42 billion 2.69 $1.30 billion $0.24 188.04

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

Summary

Earthstone Energy beats Apache on 9 of the 16 factors compared between the two stocks.

Earthstone Energy Company Profile

Earthstone Energy, Inc., an oil and natural gas development and production company, operates in the up-stream segment of the oil and natural gas industry in the United States. Its asset portfolio includes the Midland Basin of west Texas and the Eagle Ford trend of south Texas. As of December 31, 2017, the company operated 91 gross Eagle Ford wells; and 12 gross Austin Chalk wells, as well as had 79,976 thousand barrels of oil equivalent (MBOE) of total proved reserves, 19,961 MBOE of proved developed reserves, and 60,015 MBOE of proved undeveloped reserves. Earthstone Energy, Inc. was founded in 1969 and is headquartered in The Woodlands, Texas.

Apache Company Profile

Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids (NGLs). The company has operations in onshore assets located Permian and Midcontinent/Gulf Coast onshore regions; and offshore assets situated in the Gulf of Mexico region. It also holds onshore assets in Egypt's Western desert; and offshore assets in the North Sea region, including the United Kingdom. As of December 31, 2017, the company had total estimated proved reserves of 1.2 billion barrel of oil equivalent, including 583 million barrels of crude oil, 204 million barrels of NGLs, and 2.3 trillion cubic feet of natural gas. Apache Corporation was founded in 1954 and is based in Houston, Texas.

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