Financial Comparison: FutureFuel (NYSE:FF) vs. Matador Resources (NYSE:MTDR)

Matador Resources (NYSE:MTDR) and FutureFuel (NYSE:FF) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Matador Resources and FutureFuel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matador Resources	18.60%	14.32%	6.76%
FutureFuel	-19.94%	-19.75%	-15.47%

Institutional & Insider Ownership

92.0% of Matador Resources shares are held by institutional investors. Comparatively, 44.6% of FutureFuel shares are held by institutional investors. 5.9% of Matador Resources shares are held by insiders. Comparatively, 42.6% of FutureFuel shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Matador Resources has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, FutureFuel has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Matador Resources and FutureFuel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matador Resources	0	5	11	0	2.69
FutureFuel	1	0	0	0	1.00

Matador Resources currently has a consensus price target of $68.50, suggesting a potential upside of 35.96%. Given Matador Resources’ stronger consensus rating and higher probable upside, research analysts plainly believe Matador Resources is more favorable than FutureFuel.

Dividends

Matador Resources pays an annual dividend of $1.50 per share and has a dividend yield of 3.0%. FutureFuel pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. Matador Resources pays out 25.9% of its earnings in the form of a dividend. FutureFuel pays out -5.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Matador Resources has increased its dividend for 4 consecutive years. Matador Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Matador Resources and FutureFuel”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matador Resources	$3.70 billion	1.69	$759.22 million	$5.80	8.69
FutureFuel	$95.74 million	2.44	-$49.40 million	($0.70)	-7.61

Matador Resources has higher revenue and earnings than FutureFuel. FutureFuel is trading at a lower price-to-earnings ratio than Matador Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Matador Resources beats FutureFuel on 14 of the 17 factors compared between the two stocks.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.

About FutureFuel

FutureFuel Corp., together with its subsidiaries, manufactures and sells diversified chemical, bio-based fuel, and bio-based specialty chemical products in the United States. The company operates through two segments, Chemicals and Biofuels. The Chemicals segment provides various custom chemicals that are used in the coatings, chemical intermediates, industrial and consumer cleaning, oil and gas, and specialty polymers industries; and performance chemicals, such as polymer modifiers, glycerin products, and various specialty chemicals and solvents. The Biofuels segment is involved in the production and sale of biodiesel and petrodiesel blends; and markets its biodiesel products directly to customers through trucks, barges, and rail cars. FutureFuel Corp. is headquartered in Saint Louis, Missouri.