Hong Kong and China Gas (OTCMKTS:HOKCY) & Diamondback Energy (NASDAQ:FANG) Critical Analysis

Diamondback Energy (NASDAQ:FANG) and Hong Kong and China Gas (OTCMKTS:HOKCY) are both large-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for Diamondback Energy and Hong Kong and China Gas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamondback Energy	1	4	17	1	2.78
Hong Kong and China Gas	0	0	0	0	N/A

Diamondback Energy currently has a consensus target price of $210.09, suggesting a potential upside of 18.85%. Given Diamondback Energy’s higher possible upside, equities analysts clearly believe Diamondback Energy is more favorable than Hong Kong and China Gas.

Risk & Volatility

Diamondback Energy has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500. Comparatively, Hong Kong and China Gas has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Valuation & Earnings

This table compares Diamondback Energy and Hong Kong and China Gas”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamondback Energy	$9.28 billion	5.62	$3.14 billion	$19.35	9.14
Hong Kong and China Gas	$7.28 billion	1.85	$788.99 million	N/A	N/A

Diamondback Energy has higher revenue and earnings than Hong Kong and China Gas.

Dividends

Diamondback Energy pays an annual dividend of $3.60 per share and has a dividend yield of 2.0%. Hong Kong and China Gas pays an annual dividend of $0.02 per share and has a dividend yield of 2.8%. Diamondback Energy pays out 18.6% of its earnings in the form of a dividend.

Profitability

This table compares Diamondback Energy and Hong Kong and China Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamondback Energy	37.51%	19.54%	11.33%
Hong Kong and China Gas	N/A	N/A	N/A

Insider and Institutional Ownership

90.0% of Diamondback Energy shares are owned by institutional investors. 0.5% of Diamondback Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Diamondback Energy beats Hong Kong and China Gas on 12 of the 14 factors compared between the two stocks.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.

About Hong Kong and China Gas

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas, water supply and energy services in Hong Kong and Mainland China. It is involved in the provision of smart energy, piped city-gas, upstream and midstream projects, water supply and wastewater treatment, urban waste resource utilization, and natural gas filling stations, as well as new energy exploration and utilization activities. The company develops new energy projects that are low in emissions and pollution, which includes clean coal chemical business, liquefaction of methane, etc., as well as supplies town gas. It also provides network connectivity, data center, and ICT services, as well as engineering, procurement, and construction services. In addition, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Further, it is involved in water supply, and domestic sewage and industrial wastewater treatment activities. Additionally, the company manufactures polyethylene piping and fittings; as well as engages in the software development, solution implementation, and systems integration activities. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.