Analyzing SM Energy (NYSE:SM) and Stratex Oil & Gas (OTCMKTS:STTX)

SM Energy (NYSE:SM) and Stratex Oil & Gas (OTCMKTS:STTX) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Volatility & Risk

SM Energy has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Stratex Oil & Gas has a beta of 2.23, suggesting that its share price is 123% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for SM Energy and Stratex Oil & Gas, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	2	5	3	1	2.27
Stratex Oil & Gas	0	0	0	0	0.00

SM Energy currently has a consensus target price of $33.20, suggesting a potential upside of 70.19%. Given SM Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe SM Energy is more favorable than Stratex Oil & Gas.

Profitability

This table compares SM Energy and Stratex Oil & Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SM Energy	22.03%	16.67%	8.44%
Stratex Oil & Gas	N/A	N/A	N/A

Institutional & Insider Ownership

94.6% of SM Energy shares are owned by institutional investors. 1.5% of SM Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares SM Energy and Stratex Oil & Gas”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$2.69 billion	0.83	$770.29 million	$6.34	3.08
Stratex Oil & Gas	N/A	N/A	N/A	N/A	N/A

SM Energy has higher revenue and earnings than Stratex Oil & Gas.

Summary

SM Energy beats Stratex Oil & Gas on 10 of the 11 factors compared between the two stocks.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.

About Stratex Oil & Gas

Stratex Oil & Gas Holdings, Inc., an independent energy company, focuses on the acquisition, exploitation, and development of crude oil in Kansas and Texas, as well as non-operated working interests in North Dakota, Montana, Utah, Colorado, and Kansas. The company is also involved in the sale of oil and gas. The company was formerly known as Poway Muffler and Brake, Inc. and changed its name to Stratex Oil & Gas Holdings, Inc. in May 2012. Stratex Oil & Gas Holdings, Inc. is based in Salt Lake City, Utah.