Advantage Oil & Gas (NYSE: AAV) and Cimarex Energy (NYSE:XEC) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Earnings and Valuation

This table compares Advantage Oil & Gas and Cimarex Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advantage Oil & Gas $122.28 million 7.22 -$11.88 million $0.26 18.27
Cimarex Energy $1.26 billion 8.86 -$408.80 million $4.00 29.22

Advantage Oil & Gas has higher earnings, but lower revenue than Cimarex Energy. Advantage Oil & Gas is trading at a lower price-to-earnings ratio than Cimarex Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Advantage Oil & Gas and Cimarex Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advantage Oil & Gas 27.06% 3.05% 2.48%
Cimarex Energy 20.45% 16.11% 8.04%

Dividends

Cimarex Energy pays an annual dividend of $0.32 per share and has a dividend yield of 0.3%. Advantage Oil & Gas does not pay a dividend. Cimarex Energy pays out 8.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

54.8% of Advantage Oil & Gas shares are owned by institutional investors. Comparatively, 92.4% of Cimarex Energy shares are owned by institutional investors. 1.7% of Cimarex Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Advantage Oil & Gas has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Cimarex Energy has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Advantage Oil & Gas and Cimarex Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advantage Oil & Gas 0 2 1 0 2.33
Cimarex Energy 1 8 16 0 2.60

Advantage Oil & Gas presently has a consensus target price of $10.17, suggesting a potential upside of 114.04%. Cimarex Energy has a consensus target price of $137.30, suggesting a potential upside of 17.46%. Given Advantage Oil & Gas’ higher possible upside, equities analysts clearly believe Advantage Oil & Gas is more favorable than Cimarex Energy.

Summary

Cimarex Energy beats Advantage Oil & Gas on 12 of the 16 factors compared between the two stocks.

About Advantage Oil & Gas

Advantage Oil & Gas Ltd. is an intermediate natural gas and liquids development and production company. The Company is engaged in the business of natural gas exploitation, development, acquisition and production in the Province of Alberta. The Company focuses on the development of Montney resource play at Glacier, Alberta in Western Canada. The Company has drilled over 10 Montney gas wells. The Glacier property lies along the Alberta side of the border with British Columbia between Grande Prairie, Alberta and Dawson Creek, British Columbia. The primary zones of interest are within the Triassic Montney and Doig formation siltstones. The Glacier property consists of over 90 net sections of land with Doig/Montney interests. It owns and operates a gas plant located at 5-02-76-12W6. It also holds interest in approximately 20 additional sections of Doig/Montney land rights in the Glacier, Valhalla and Wembley area proximal to its existing land holdings.

About Cimarex Energy

Cimarex Energy Co. is an independent oil and gas exploration and production company. The Company operates in exploration and production (E&P) segment. Its operations are located in Oklahoma, Texas and New Mexico. Its E&P activities take place primarily in two areas: the Permian Basin and the Mid-Continent region. Its Permian Basin region encompasses west Texas and southeast New Mexico. Its Mid-Continent region consists of Oklahoma and the Texas Panhandle. As of fiscal year ended December 31, 2016 (fiscal 2016), its activities in the Mid-Continent were focused in the Woodford shale and the Meramec horizon, both in Oklahoma. During fiscal 2016, production from the Mid-Continent averaged 457 millions of cubic feet equivalent (MMcfe) per day, or 47% of total company production. All of the Company’s oil and gas assets are located in the United States. As of December 31, 2016, 63% of its total proved reserves were located in the Mid-Continent region and 37% were in the Permian Basin.

Receive News & Stock Ratings for Advantage Oil & Gas Ltd Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Advantage Oil & Gas Ltd and related stocks with our FREE daily email newsletter.