Baytex Energy (NYSE: ICD) and Independence Contract Drilling (NYSE:ICD) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Valuation and Earnings

This table compares Baytex Energy and Independence Contract Drilling’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baytex Energy $1.42 billion 0.52 $67.24 million ($0.02) -154.50
Independence Contract Drilling $90.01 million 1.81 -$24.29 million ($0.53) -8.08

Baytex Energy has higher revenue and earnings than Independence Contract Drilling. Baytex Energy is trading at a lower price-to-earnings ratio than Independence Contract Drilling, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baytex Energy and Independence Contract Drilling’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baytex Energy -0.55% -8.23% -3.55%
Independence Contract Drilling -19.21% -7.34% -5.63%

Risk & Volatility

Baytex Energy has a beta of 3.02, meaning that its share price is 202% more volatile than the S&P 500. Comparatively, Independence Contract Drilling has a beta of 2.63, meaning that its share price is 163% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Baytex Energy and Independence Contract Drilling, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baytex Energy 1 1 9 0 2.73
Independence Contract Drilling 0 1 4 0 2.80

Baytex Energy presently has a consensus target price of $5.00, indicating a potential upside of 61.81%. Independence Contract Drilling has a consensus target price of $6.38, indicating a potential upside of 48.95%. Given Baytex Energy’s higher probable upside, research analysts plainly believe Baytex Energy is more favorable than Independence Contract Drilling.

Institutional and Insider Ownership

29.7% of Baytex Energy shares are held by institutional investors. Comparatively, 75.8% of Independence Contract Drilling shares are held by institutional investors. 11.8% of Independence Contract Drilling shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Baytex Energy beats Independence Contract Drilling on 8 of the 13 factors compared between the two stocks.

Baytex Energy Company Profile

Baytex Energy Corp., an oil and gas company, engages in the acquisition, development, and production of oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. It offers heavy oil, heavy gravity crude oil, bitumen, light oil, and natural gas liquids. Its primary oil resource plays include the Eagle Ford in Texas, and the Peace River Oil Sands and Lloydminster heavy oil projects in North America. The company provides 612 million barrels of oil equivalent; bitumen in low estimate to 1,181 million barrels of oil equivalent; and bitumen in the high estimate to 798 million barrels of oil equivalent. Baytex Energy Corp. was founded in 1993 and is headquartered in Calgary, Canada.

Independence Contract Drilling Company Profile

Independence Contract Drilling, Inc. provides land-based contract drilling services for oil and natural gas producers in the United States. The company constructs, owns, and operates a fleet of pad-optimal ShaleDriller rigs that are engineered and designed to optimize the development of various oil and natural gas properties in the Permian Basin. Its fleet consists of 14 rigs. The company was founded in 2011 and is headquartered in Houston, Texas.

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