Laredo Petroleum (NYSE:LPI) and Royale Energy Funds (OTCMKTS:ROYL) are both small-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Institutional and Insider Ownership

96.6% of Laredo Petroleum shares are owned by institutional investors. Comparatively, 0.0% of Royale Energy Funds shares are owned by institutional investors. 3.0% of Laredo Petroleum shares are owned by insiders. Comparatively, 65.0% of Royale Energy Funds shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Laredo Petroleum and Royale Energy Funds’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Laredo Petroleum -40.90% 15.51% 7.11%
Royale Energy Funds N/A N/A N/A

Risk & Volatility

Laredo Petroleum has a beta of 1.99, meaning that its stock price is 99% more volatile than the S&P 500. Comparatively, Royale Energy Funds has a beta of 3.88, meaning that its stock price is 288% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Laredo Petroleum and Royale Energy Funds, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Laredo Petroleum 1 6 4 0 2.27
Royale Energy Funds 0 0 0 0 N/A

Laredo Petroleum presently has a consensus price target of $4.16, indicating a potential upside of 873.07%. Given Laredo Petroleum’s higher possible upside, research analysts clearly believe Laredo Petroleum is more favorable than Royale Energy Funds.

Earnings & Valuation

This table compares Laredo Petroleum and Royale Energy Funds’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Laredo Petroleum $837.28 million 0.12 -$342.46 million $0.74 0.58
Royale Energy Funds $1.01 million 4.40 -$2.42 million N/A N/A

Royale Energy Funds has lower revenue, but higher earnings than Laredo Petroleum.

Summary

Laredo Petroleum beats Royale Energy Funds on 6 of the 11 factors compared between the two stocks.

About Laredo Petroleum

Laredo Petroleum, Inc., an independent energy company, engages in the acquisition, exploration, and development of oil and natural gas properties in the Permian Basin of West Texas, the United States. The company also provides midstream and marketing services comprising transportation and marketing of oil and natural gas; and natural gas lift systems, crude oil and natural gas gathering, and water delivery and takeaway services. As of December 31, 2018, it had assembled 120,617 net acres in the Permian Basin; and had total proved reserves of 238,167 thousand barrels of oil equivalent. The company was formerly known as Laredo Petroleum Holdings, Inc. and changed its name to Laredo Petroleum, Inc. in December 2013. Laredo Petroleum, Inc. was founded in 2006 and is headquartered in Tulsa, Oklahoma.

About Royale Energy Funds

Royale Energy, Inc. focuses on the acquisition, development, and marketing of oil and natural gas in the United States. Its principal operations are located in California's Los Angeles and Sacramento Basins. The company was founded in 1986 and is based in El Cajon, California.

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