Ring Energy (NYSE: REI) and Vanguard Natural Resources (NASDAQ:VNR) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Profitability

This table compares Ring Energy and Vanguard Natural Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ring Energy N/A N/A N/A
Vanguard Natural Resources -57.32% N/A -16.70%

Earnings & Valuation

This table compares Ring Energy and Vanguard Natural Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ring Energy $42.26 million 16.58 $21.77 million N/A N/A
Vanguard Natural Resources N/A N/A N/A ($9.14) -0.02

Ring Energy has higher revenue and earnings than Vanguard Natural Resources.

Analyst Recommendations

This is a summary of current recommendations for Ring Energy and Vanguard Natural Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ring Energy 0 0 6 0 3.00
Vanguard Natural Resources 3 1 0 0 1.25

Ring Energy presently has a consensus price target of $18.60, indicating a potential upside of 43.74%. Given Ring Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Ring Energy is more favorable than Vanguard Natural Resources.

Insider and Institutional Ownership

4.0% of Vanguard Natural Resources shares are held by institutional investors. 1.3% of Vanguard Natural Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Ring Energy beats Vanguard Natural Resources on 6 of the 8 factors compared between the two stocks.

About Ring Energy

Ring Energy, Inc. acquires, explores for, develops, and produces oil and natural gas in Texas and Kansas, the United States. As of December 31, 2016, its proved reserves consisted of approximately 27.7 million barrel of oil equivalent. The company also owns interests in 32,663 net developed and undeveloped acres in Andrews and Gaines counties, and 20,490 net developed and undeveloped acres in Reeves and Culberson counties, Texas; and 14,549 net developed and undeveloped acres in Kansas. It primarily sells its oil and natural gas production to end users, marketers, and other purchasers. The company was formerly known as Transglobal Mining Corp. and changed its name to Ring Energy, Inc. in March 2008. Ring Energy, Inc. was founded in 2004 and is headquartered in Midland, Texas.

About Vanguard Natural Resources

Vanguard Natural Resources, Inc is an independent oil and gas company. The Company is focused on the acquisition and development of oil and natural gas properties in the United States. Through its operating subsidiaries, the Company owns properties, and oil and natural gas reserves primarily located in over 10 operating basins: the Green River Basin in Wyoming; the Permian Basin in West Texas and New Mexico; the Gulf Coast Basin in Texas, Louisiana, Mississippi and Alabama; the Anadarko Basin in Oklahoma and North Texas; the Piceance Basin in Colorado; the Big Horn Basin in Wyoming and Montana; the Arkoma Basin in Arkansas and Oklahoma; the Williston Basin in North Dakota and Montana; the Wind River Basin in Wyoming, and the Powder River Basin in Wyoming.

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