Jones Energy (JONE) and Cimarex Energy (XEC) Financial Contrast

Jones Energy (NYSE: JONE) and Cimarex Energy (NYSE:XEC) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Jones Energy and Cimarex Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jones Energy 2 3 1 0 1.83
Cimarex Energy 0 5 18 0 2.78

Jones Energy currently has a consensus target price of $1.90, suggesting a potential upside of 90.00%. Cimarex Energy has a consensus target price of $140.00, suggesting a potential upside of 41.84%. Given Jones Energy’s higher possible upside, research analysts plainly believe Jones Energy is more favorable than Cimarex Energy.

Dividends

Cimarex Energy pays an annual dividend of $0.32 per share and has a dividend yield of 0.3%. Jones Energy does not pay a dividend. Cimarex Energy pays out 6.2% of its earnings in the form of a dividend.

Profitability

This table compares Jones Energy and Cimarex Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jones Energy -105.90% -0.80% -0.35%
Cimarex Energy 25.77% 18.73% 9.47%

Valuation and Earnings

This table compares Jones Energy and Cimarex Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jones Energy $127.85 million 0.77 -$42.55 million ($2.84) -0.35
Cimarex Energy $1.92 billion 4.90 $494.32 million $5.19 19.02

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

Institutional & Insider Ownership

57.4% of Jones Energy shares are owned by institutional investors. Comparatively, 91.7% of Cimarex Energy shares are owned by institutional investors. 37.2% of Jones Energy shares are owned by insiders. Comparatively, 1.7% of Cimarex Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Jones Energy has a beta of 2.58, indicating that its share price is 158% more volatile than the S&P 500. Comparatively, Cimarex Energy has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Summary

Cimarex Energy beats Jones Energy on 12 of the 16 factors compared between the two stocks.

Jones Energy Company Profile

Jones Energy, Inc. is an independent oil and gas company engaged in the exploration, development, production and acquisition of oil and natural gas properties. The Company’s assets are located within the Anadarko and Arkoma basins of Texas and Oklahoma. It owns leasehold interests in oil and natural gas producing properties, as well as in undeveloped acreage, located in the Anadarko and Arkoma basins in Texas and Oklahoma. The Company’s oil is generally sold under short-term, extendable and cancellable agreements with unaffiliated purchasers. The Company’s natural gas is sold at delivery points at or near producing wells to natural gas gathering and marketing companies. Its total estimated proved reserves are approximately 101.7 million barrels of oil equivalent (MMBoe). Approximately 25% of its total estimated proved reserves consist of oil, over 32% consist of natural gas liquids (NGLs) and over 43% consist of natural gas. Its properties include over 1,020 gross producing wells.

Cimarex Energy Company Profile

Cimarex Energy Co. is an independent oil and gas exploration and production company. The Company operates in exploration and production (E&P) segment. Its operations are located in Oklahoma, Texas and New Mexico. Its E&P activities take place primarily in two areas: the Permian Basin and the Mid-Continent region. Its Permian Basin region encompasses west Texas and southeast New Mexico. Its Mid-Continent region consists of Oklahoma and the Texas Panhandle. As of fiscal year ended December 31, 2016 (fiscal 2016), its activities in the Mid-Continent were focused in the Woodford shale and the Meramec horizon, both in Oklahoma. During fiscal 2016, production from the Mid-Continent averaged 457 millions of cubic feet equivalent (MMcfe) per day, or 47% of total company production. All of the Company’s oil and gas assets are located in the United States. As of December 31, 2016, 63% of its total proved reserves were located in the Mid-Continent region and 37% were in the Permian Basin.

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