Critical Analysis: Montauk Renewables (NASDAQ:MNTK) and BKV (NYSE:BKV)

Montauk Renewables (NASDAQ:MNTK) and BKV (NYSE:BKV) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Volatility and Risk

Montauk Renewables has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, BKV has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Insider and Institutional Ownership

16.4% of Montauk Renewables shares are held by institutional investors. 54.3% of Montauk Renewables shares are held by insiders. Comparatively, 2.5% of BKV shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Montauk Renewables and BKV’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Montauk Renewables	0.40%	0.28%	0.17%
BKV	21.71%	6.43%	3.98%

Earnings & Valuation

This table compares Montauk Renewables and BKV”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Montauk Renewables	$176.38 million	1.37	$1.75 million	$0.02	85.00
BKV	$1.01 billion	2.52	$173.13 million	$3.30	7.05

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Montauk Renewables and BKV, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Montauk Renewables	1	4	0	0	1.80
BKV	0	2	8	0	2.80

Montauk Renewables presently has a consensus price target of $1.80, indicating a potential upside of 5.88%. BKV has a consensus price target of $33.88, indicating a potential upside of 45.68%. Given BKV’s stronger consensus rating and higher probable upside, analysts plainly believe BKV is more favorable than Montauk Renewables.

Summary

BKV beats Montauk Renewables on 11 of the 14 factors compared between the two stocks.

About Montauk Renewables

Montauk Renewables, Inc., a renewable energy company, engages in recovery and processing of biogas from landfills and other non-fossil fuel sources. It operates in two segments, Renewable Natural Gas and Renewable Electricity Generation. The company develops, owns, and operates renewable natural gas (RNG) projects that captures methane and prevents it from being released into the atmosphere by converting it into either RNG or electrical power for the electrical grid. Its customers for RNG and renewable identification numbers (RIN) include large, long-term owner-operators of landfills and livestock farms, local utilities, and large refiners in the natural gas and refining sectors. Montauk Renewables, Inc. was founded in 1980 and is headquartered in Pittsburgh, Pennsylvania.

About BKV

BKV Corporation engages in the acquisition, operation, and development of natural gas and NGL properties. It is also involved in the gathering, processing, and transportation of natural gas. The company was founded in 2015 and is based in Denver, Colorado with additional offices in Tunkhannock, Pennsylvania and Fort Worth, Texas. BKV Corporation, LLC operates as a subsidiary of Banpu North America Corporation.