Critical Comparison: Magnolia Oil & Gas (NYSE:MGY) and Gran Tierra Energy (NYSE:GTE)

Magnolia Oil & Gas (NYSE:MGY) and Gran Tierra Energy (NYSE:GTE) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

94.7% of Magnolia Oil & Gas shares are held by institutional investors. Comparatively, 31.7% of Gran Tierra Energy shares are held by institutional investors. 0.9% of Magnolia Oil & Gas shares are held by insiders. Comparatively, 5.8% of Gran Tierra Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Magnolia Oil & Gas has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Gran Tierra Energy has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Magnolia Oil & Gas and Gran Tierra Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnolia Oil & Gas	0	6	10	2	2.78
Gran Tierra Energy	0	0	2	1	3.33

Magnolia Oil & Gas presently has a consensus target price of $31.71, indicating a potential upside of 26.25%. Gran Tierra Energy has a consensus target price of $9.72, indicating a potential downside of 5.58%. Given Magnolia Oil & Gas’ higher possible upside, analysts plainly believe Magnolia Oil & Gas is more favorable than Gran Tierra Energy.

Profitability

This table compares Magnolia Oil & Gas and Gran Tierra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnolia Oil & Gas	28.77%	21.04%	14.46%
Gran Tierra Energy	7.17%	11.36%	3.28%

Earnings & Valuation

This table compares Magnolia Oil & Gas and Gran Tierra Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnolia Oil & Gas	$1.31 billion	4.54	$325.25 million	$2.28	11.02
Gran Tierra Energy	$638.42 million	0.57	-$6.29 million	($7.25)	-1.42

Magnolia Oil & Gas has higher revenue and earnings than Gran Tierra Energy. Gran Tierra Energy is trading at a lower price-to-earnings ratio than Magnolia Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Summary

Magnolia Oil & Gas beats Gran Tierra Energy on 13 of the 15 factors compared between the two stocks.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.

About Gran Tierra Energy

Gran Tierra Energy Inc., together with its subsidiaries, engages in the exploration and production of oil and gas properties in Colombia and Ecuador. The company was founded in 2003 and is headquartered in Calgary, Canada.