QEP Resources (QEP) & Earthstone Energy (ESTE) Head-To-Head Review


QEP Resources (NYSE:QEP) and Earthstone Energy (NYSE:ESTE) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Insider & Institutional Ownership

99.2% of QEP Resources shares are held by institutional investors. Comparatively, 19.9% of Earthstone Energy shares are held by institutional investors. 1.7% of QEP Resources shares are held by insiders. Comparatively, 63.0% of Earthstone Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
QEP Resources -60.23% 1.91% 0.89%
Earthstone Energy 11.99% 3.75% 3.08%

Analyst Recommendations

This is a summary of recent ratings and target prices for QEP Resources and Earthstone Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QEP Resources 0 10 5 0 2.33
Earthstone Energy 0 0 7 0 3.00

QEP Resources presently has a consensus price target of $11.93, indicating a potential upside of 57.00%. Earthstone Energy has a consensus price target of $11.40, indicating a potential upside of 54.26%. Given QEP Resources’ higher possible upside, analysts clearly believe QEP Resources is more favorable than Earthstone Energy.

Volatility and Risk

QEP Resources has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, Earthstone Energy has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QEP Resources $1.93 billion 0.94 -$1.01 billion ($0.17) -44.71
Earthstone Energy $165.36 million 2.87 $42.33 million $1.44 5.13

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

Summary

Earthstone Energy beats QEP Resources on 10 of the 14 factors compared between the two stocks.

QEP Resources Company Profile

QEP Resources, Inc. operates as a crude oil and natural gas exploration and production company in the United States. The company conducts exploration and production activities in the Permian Basin in Western Texas; and Williston Basin in North Dakota. As of December 31, 2018, it had estimated proved reserves of approximately 658.2 MMboe. The company sells its gas, oil, and natural gas liquids to various customers, including wholesale marketers, industrial users, local distribution companies, midstream service providers, and utility companies. QEP Resources, Inc. was incorporated in 2010 and is headquartered in Denver, Colorado.

Earthstone Energy Company Profile

Earthstone Energy, Inc., an independent energy company, engages in the development and operation of oil and gas properties 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, 2018, the company operated 93 gross Eagle Ford wells; and 13 gross Austin Chalk wells, as well as had 98,847 thousand barrels of oil equivalent (MBOE) of total proved reserves comprised 23,646 MBOE of proved developed reserves and 75,201 MBOE of proved undeveloped reserves. Earthstone Energy, Inc. was founded in 1969 and is headquartered in The Woodlands, Texas.



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