Critical Contrast: SM Energy (NYSE:SM) & Geopark (NYSE:GPRK)

SM Energy (NYSE:SM) and Geopark (NYSE:GPRK) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Earnings and Valuation

This table compares SM Energy and Geopark”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$3.78 billion	1.95	$648.00 million	$2.38	12.88
Geopark	$492.52 million	1.03	$49.67 million	$1.05	9.32

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

Volatility & Risk

SM Energy has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Geopark has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Dividends

SM Energy pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Geopark pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. SM Energy pays out 37.0% of its earnings in the form of a dividend. Geopark pays out 8.6% 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. SM Energy has increased its dividend for 4 consecutive years and Geopark has increased its dividend for 3 consecutive years. SM Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

94.6% of SM Energy shares are owned by institutional investors. Comparatively, 68.2% of Geopark shares are owned by institutional investors. 0.5% of SM Energy shares are owned by insiders. Comparatively, 1.5% of Geopark shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for SM Energy and Geopark, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	1	7	5	2	2.53
Geopark	0	2	2	0	2.50

SM Energy currently has a consensus target price of $34.54, indicating a potential upside of 12.67%. Geopark has a consensus target price of $11.50, indicating a potential upside of 17.47%. Given Geopark’s higher probable upside, analysts clearly believe Geopark is more favorable than SM Energy.

Profitability

This table compares SM Energy and Geopark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SM Energy	3.45%	13.93%	6.29%
Geopark	11.74%	36.71%	8.06%

Summary

SM Energy beats Geopark on 12 of the 18 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 Geopark

GeoPark Limited operates as an oil and natural gas exploration and production company primarily in Chile, Colombia, Brazil, Argentina, Ecuador, and other Latin American countries. It engages in the exploration, development, and production of oil and gas reserves. The company was formerly known as GeoPark Holdings Limited and changed its name to GeoPark Limited in July 2013. GeoPark Limited was founded in 2002 and is based in Bogotá, Colombia.