Head to Head Analysis: Legacy Reserves (LGCYQ) vs. Its Competitors

Legacy Reserves (OTCMKTS: LGCYQ) is one of 182 publicly-traded companies in the “Crude petroleum & natural gas” industry, but how does it weigh in compared to its peers? We will compare Legacy Reserves to related businesses based on the strength of its valuation, profitability, dividends, institutional ownership, analyst recommendations, risk and earnings.

Volatility and Risk

Legacy Reserves has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Legacy Reserves’ peers have a beta of 2.02, meaning that their average stock price is 102% more volatile than the S&P 500.

Valuation & Earnings

This table compares Legacy Reserves and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Legacy Reserves $554.86 million $43.83 million 0.05
Legacy Reserves Competitors $10.87 billion $775.51 million 8.29

Legacy Reserves’ peers have higher revenue and earnings than Legacy Reserves. Legacy Reserves is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Legacy Reserves and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Legacy Reserves -18.46% -4.82% -5.33%
Legacy Reserves Competitors -3.17% 2.96% 6.03%

Analyst Ratings

This is a summary of current ratings and target prices for Legacy Reserves and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Legacy Reserves 0 0 0 0 N/A
Legacy Reserves Competitors 2168 8663 12340 403 2.47

As a group, “Crude petroleum & natural gas” companies have a potential upside of 50.23%. Given Legacy Reserves’ peers higher probable upside, analysts clearly believe Legacy Reserves has less favorable growth aspects than its peers.

Institutional and Insider Ownership

21.7% of Legacy Reserves shares are owned by institutional investors. Comparatively, 57.3% of shares of all “Crude petroleum & natural gas” companies are owned by institutional investors. 0.8% of Legacy Reserves shares are owned by company insiders. Comparatively, 10.8% of shares of all “Crude petroleum & natural gas” companies 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.

Summary

Legacy Reserves peers beat Legacy Reserves on 9 of the 9 factors compared.

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.

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