Head to Head Review: Riley Exploration Permian (NYSE:REPX) vs. FutureFuel (NYSE:FF)

FutureFuel (NYSE:FF) and Riley Exploration Permian (NYSE:REPX) are both small-cap energy companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Risk & Volatility

FutureFuel has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Riley Exploration Permian has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Profitability

This table compares FutureFuel and Riley Exploration Permian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FutureFuel	-19.94%	-19.75%	-15.47%
Riley Exploration Permian	28.48%	23.82%	11.31%

Analyst Ratings

This is a summary of current ratings and recommmendations for FutureFuel and Riley Exploration Permian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FutureFuel	1	0	0	0	1.00
Riley Exploration Permian	0	1	3	0	2.75

Riley Exploration Permian has a consensus target price of $43.00, suggesting a potential downside of 9.95%. Given Riley Exploration Permian’s stronger consensus rating and higher probable upside, analysts plainly believe Riley Exploration Permian is more favorable than FutureFuel.

Institutional and Insider Ownership

44.6% of FutureFuel shares are owned by institutional investors. Comparatively, 58.9% of Riley Exploration Permian shares are owned by institutional investors. 42.6% of FutureFuel shares are owned by company insiders. Comparatively, 4.2% of Riley Exploration Permian shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares FutureFuel and Riley Exploration Permian”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FutureFuel	$153.21 million	1.49	-$49.40 million	($0.70)	-7.46
Riley Exploration Permian	$483.86 million	2.19	$111.59 million	$5.52	8.65

Riley Exploration Permian has higher revenue and earnings than FutureFuel. FutureFuel is trading at a lower price-to-earnings ratio than Riley Exploration Permian, indicating that it is currently the more affordable of the two stocks.

Dividends

FutureFuel pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. Riley Exploration Permian pays an annual dividend of $1.60 per share and has a dividend yield of 3.4%. FutureFuel pays out -5.7% of its earnings in the form of a dividend. Riley Exploration Permian pays out 29.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Riley Exploration Permian has increased its dividend for 3 consecutive years. Riley Exploration Permian is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Riley Exploration Permian beats FutureFuel on 15 of the 17 factors compared between the two stocks.

About FutureFuel

FutureFuel Corp., together with its subsidiaries, manufactures and sells diversified chemical, bio-based fuel, and bio-based specialty chemical products in the United States. The company operates through two segments, Chemicals and Biofuels. The Chemicals segment provides various custom chemicals that are used in the coatings, chemical intermediates, industrial and consumer cleaning, oil and gas, and specialty polymers industries; and performance chemicals, such as polymer modifiers, glycerin products, and various specialty chemicals and solvents. The Biofuels segment is involved in the production and sale of biodiesel and petrodiesel blends; and markets its biodiesel products directly to customers through trucks, barges, and rail cars. FutureFuel Corp. is headquartered in Saint Louis, Missouri.

About Riley Exploration Permian

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the Northwest Shelf and Yeso trend of the Permian Basin. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Eddy County, New Mexico. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.