Atlas Energy Group (NASDAQ: ATLS) and Stone Energy Corporation (NYSE:SGY) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Insider and Institutional Ownership

89.4% of Stone Energy Corporation shares are owned by institutional investors. 3.5% of Stone Energy Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Atlas Energy Group and Stone Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Energy Group -126.53% N/A -18.97%
Stone Energy Corporation 41.74% -215.45% 29.97%

Earnings & Valuation

This table compares Atlas Energy Group and Stone Energy Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlas Energy Group $39.46 million 0.06 $20.86 million N/A N/A
Stone Energy Corporation $364.82 million 1.37 $201.90 million N/A N/A

Stone Energy Corporation has higher revenue and earnings than Atlas Energy Group.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Atlas Energy Group and Stone Energy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Energy Group 0 0 0 0 N/A
Stone Energy Corporation 1 1 1 0 2.00

Stone Energy Corporation has a consensus target price of $6.50, indicating a potential downside of 74.04%. Given Stone Energy Corporation’s higher possible upside, analysts plainly believe Stone Energy Corporation is more favorable than Atlas Energy Group.

Summary

Stone Energy Corporation beats Atlas Energy Group on 9 of the 10 factors compared between the two stocks.

About Atlas Energy Group

Atlas Energy Group, LLC is an energy management company, which acquires and develops upstream and midstream oil and gas assets. The Company has ownership interests in the general partner Class A units, and over 23.3% limited partner interest in Atlas Resource Partners, L.P. (ARP), which is an independent developer and producer of natural gas, crude oil and natural gas liquids; over 80% general partner interest and approximately 2.1% limited partner interest in Atlas Growth Partners, L.P. (AGP), which conducts natural gas and oil operations in the mid-continent region of the United States, and owns approximately 15.9% general partner interest and over 12% limited partner interest in Lightfoot Capital Partners, L.P. and Lightfoot Capital Partners GP, LLC, its general partner, which incubates new master limited partnerships (MLPs) and invests in existing MLPs. Its segments include ARP, AGP, and Corporate and other. The Company focuses on the development and growth of energy enterprises.

About Stone Energy Corporation

Stone Energy Corporation is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. The Company operates in the Gulf of Mexico (GOM) basin. It has leveraged its operations in the GOM conventional shelf and has its reserve base in the prolific basins of the GOM deep water, Gulf Coast deep gas, and the Marcellus and Utica shales in Appalachia. Its estimated proved oil and natural gas reserves are over 60 million barrels of oil equivalents (MMBoe) or 340 billion cubic feet equivalent (Bcfe). Over 95 MMBoe or 570 Bcfe of its estimated proved reserves are revised downward. It has made investments in seismic data and leasehold interests, and has geological, geophysical, engineering and operational operations in deep water arena to evaluate potential exploration, development and acquisition opportunities. It holds over two deep water platforms, producing reserves and various leases.

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