Contrasting SM Energy (NYSE:SM) & Legacy Reserves (OTCMKTS:LGCYQ)

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

Insider & Institutional Ownership

94.6% of SM Energy shares are owned by institutional investors. 0.5% of SM Energy shares are owned by company insiders. Comparatively, 0.8% of Legacy Reserves shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares SM Energy and Legacy Reserves’ 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%
Legacy Reserves	N/A	N/A	N/A

Earnings & Valuation

This table compares SM Energy and Legacy Reserves”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$3.15 billion	2.02	$648.00 million	$2.38	11.14
Legacy Reserves	N/A	N/A	N/A	N/A	N/A

SM Energy has higher revenue and earnings than Legacy Reserves.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SM Energy and Legacy Reserves, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	0	6	9	0	2.60
Legacy Reserves	0	0	0	0	0.00

SM Energy presently has a consensus target price of $37.00, suggesting a potential upside of 39.54%. Given SM Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe SM Energy is more favorable than Legacy Reserves.

Summary

SM Energy beats Legacy Reserves on 8 of the 9 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 Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.