Clayton Williams Energy (NYSE: CWEI) and Marathon Oil (NYSE:MRO) are both mid-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Volatility and Risk

Clayton Williams Energy has a beta of 2.35, indicating that its stock price is 135% more volatile than the S&P 500. Comparatively, Marathon Oil has a beta of 2.39, indicating that its stock price is 139% more volatile than the S&P 500.

Insider and Institutional Ownership

67.8% of Clayton Williams Energy shares are held by institutional investors. Comparatively, 80.3% of Marathon Oil shares are held by institutional investors. 36.4% of Clayton Williams Energy shares are held by insiders. Comparatively, 0.4% of Marathon Oil shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Marathon Oil pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Clayton Williams Energy does not pay a dividend. Marathon Oil pays out -2.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for Clayton Williams Energy and Marathon Oil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clayton Williams Energy 0 1 0 0 2.00
Marathon Oil 0 11 11 0 2.50

Marathon Oil has a consensus target price of $16.66, indicating a potential upside of 2.07%. Given Marathon Oil’s stronger consensus rating and higher probable upside, analysts plainly believe Marathon Oil is more favorable than Clayton Williams Energy.

Profitability

This table compares Clayton Williams Energy and Marathon Oil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clayton Williams Energy -16.83% -63.50% -7.44%
Marathon Oil -148.07% -3.02% -1.60%

Valuation and Earnings

This table compares Clayton Williams Energy and Marathon Oil’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Clayton Williams Energy N/A N/A N/A ($21.71) -6.08
Marathon Oil $4.65 billion 2.98 -$2.14 billion ($8.32) -1.96

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

Summary

Marathon Oil beats Clayton Williams Energy on 11 of the 13 factors compared between the two stocks.

Clayton Williams Energy Company Profile

Clayton Williams Energy, Inc. is an independent oil and gas company engaged in the exploration for and production of oil and natural gas primarily in its core area in Southern Reeves County, Texas. The Company operates through two segments: oil and gas exploration and production, and contract drilling services. The Company focuses on developmental drilling in prolific oil shale provinces. The Company has holdings in the oil shale plays in the United States, the Wolfcamp Shale in the Southern Delaware Basin of West Texas. Its exploration program consists of generating exploratory prospects, leasing the acreage related to these prospects, drilling exploratory wells on these prospects to determine if recoverable oil and gas reserves exist, drilling developmental wells on these prospects and producing and selling any resulting oil and gas production. The Permian Basin is a sedimentary basin in West Texas and Southeastern New Mexico.

Marathon Oil Company Profile

Marathon Oil Corporation is an exploration and production (E&P) company. The Company operates through three segments: North America E&P, International E&P and Oil Sands Mining. The North America E&P segment explores for, produces and markets crude oil and condensate, natural gas liquids (NGLs) and natural gas in North America. The International E&P segment explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of North America, and produces and markets products manufactured from natural gas, such as liquefied natural gas (LNG) and methanol, in Equatorial Guinea (E.G.). The Oil Sands Mining segment mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.

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