Financial Contrast: Legacy Reserves LP Unit (LGCY) vs. Crescent Point Energy (CPG)

Legacy Reserves LP Unit (NASDAQ:LGCY) and Crescent Point Energy (NYSE:CPG) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Legacy Reserves LP Unit and Crescent Point Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Legacy Reserves LP Unit 0 2 0 0 2.00
Crescent Point Energy 0 3 2 0 2.40

Crescent Point Energy has a consensus price target of $16.63, suggesting a potential upside of 161.81%. Given Crescent Point Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Crescent Point Energy is more favorable than Legacy Reserves LP Unit.

Dividends

Crescent Point Energy pays an annual dividend of $0.28 per share and has a dividend yield of 4.4%. Legacy Reserves LP Unit does not pay a dividend. Crescent Point Energy pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Legacy Reserves LP Unit has increased its dividend for 7 consecutive years.

Profitability

This table compares Legacy Reserves LP Unit and Crescent Point Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Legacy Reserves LP Unit -8.74% -1.87% -2.19%
Crescent Point Energy -16.48% 1.80% 1.02%

Insider and Institutional Ownership

21.3% of Legacy Reserves LP Unit shares are held by institutional investors. Comparatively, 39.0% of Crescent Point Energy shares are held by institutional investors. 40.6% of Legacy Reserves LP Unit shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Legacy Reserves LP Unit has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, Crescent Point Energy has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Earnings & Valuation

This table compares Legacy Reserves LP Unit and Crescent Point Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Legacy Reserves LP Unit $436.30 million 0.91 -$53.89 million ($0.50) -10.32
Crescent Point Energy $2.55 billion 1.37 -$95.65 million $0.14 45.36

Legacy Reserves LP Unit has higher earnings, but lower revenue than Crescent Point Energy. Legacy Reserves LP Unit is trading at a lower price-to-earnings ratio than Crescent Point Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Crescent Point Energy beats Legacy Reserves LP Unit on 11 of the 17 factors compared between the two stocks.

About Legacy Reserves LP Unit

Legacy Reserves LP acquires and develops oil and natural gas properties primarily in the Permian Basin, East Texas, Rocky Mountain, and Mid-Continent regions of the United States. As of December 31, 2017, the company owned interests in producing oil and natural gas properties in 606 fields comprising 10,492 gross productive wells, including 3,497 operated and 6,995 non-operated wells located in the Permian Basin, East Texas, Piceance Basin of Colorado, Texas Panhandle, Wyoming, North Dakota, Montana, Oklahoma, and other states. It had proved reserves of approximately 180.0 million barrels of crude oil equivalent. Legacy Reserves LP was founded in 2005 and is headquartered in Midland, Texas.

About Crescent Point Energy

Crescent Point Energy Corp. acquires, explores, develops, and produces light and medium oil and natural gas properties in Western Canada and the United States. The company's crude oil and natural gas properties, and related assets are located in the provinces of Saskatchewan, Alberta, British Columbia, and Manitoba; and the states of North Dakota, Montana, and Utah. Crescent Point Energy Corp. is headquartered in Calgary, Canada..

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