Denbury Resources (NYSE:DNR) and Sanchez Energy (OTCMKTS:SNEC) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Risk and Volatility

Denbury Resources has a beta of 3.37, suggesting that its stock price is 237% more volatile than the S&P 500. Comparatively, Sanchez Energy has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Earnings and Valuation

This table compares Denbury Resources and Sanchez Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Denbury Resources $1.47 billion 0.35 $322.70 million $0.48 2.31
Sanchez Energy $1.06 billion 0.01 $85.21 million N/A N/A

Denbury Resources has higher revenue and earnings than Sanchez Energy.

Insider and Institutional Ownership

80.1% of Denbury Resources shares are held by institutional investors. Comparatively, 0.7% of Sanchez Energy shares are held by institutional investors. 1.2% of Denbury Resources shares are held by insiders. Comparatively, 11.1% of Sanchez Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Denbury Resources and Sanchez Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Denbury Resources 1 6 0 0 1.86
Sanchez Energy 0 0 0 0 N/A

Denbury Resources presently has a consensus target price of $4.43, suggesting a potential upside of 299.40%. Given Denbury Resources’ higher probable upside, equities research analysts plainly believe Denbury Resources is more favorable than Sanchez Energy.

Profitability

This table compares Denbury Resources and Sanchez Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Denbury Resources 18.06% 20.60% 4.55%
Sanchez Energy 2.22% -18.15% 3.09%

Summary

Denbury Resources beats Sanchez Energy on 9 of the 10 factors compared between the two stocks.

About Denbury Resources

Denbury Resources Inc. operates as an independent oil and natural gas company in the United States. It holds interests in various oil and natural gas properties located in Mississippi, Texas, Louisiana, and Alabama in the Gulf Coast region; and in Montana, North Dakota, and Wyoming in the Rocky Mountain region. As of December 31, 2018, the company had 262 million barrels of oil equivalent of estimated proved oil and natural gas reserves, including 255 million barrels of crude oil, and condensate and natural gas liquids, as well as 43 billion cubic feet of natural gas. Denbury Resources Inc. was founded in 1951 and is headquartered in Plano, Texas.

About Sanchez Energy

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of onshore unconventional oil and natural gas resources in the United States. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2018, the company had assembled approximately 271,000 net acres in the Eagle Ford Shale; and owned approximately 34,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered in Houston, Texas.

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