Sanchez Energy (OTCMKTS:SNEC) and Northern Oil and Gas (NYSE:NOG) Critical Analysis

Sanchez Energy (OTCMKTS:SNEC) and Northern Oil and Gas (NYSE:NOG) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Risk & Volatility

Sanchez Energy has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.

Profitability

This table compares Sanchez Energy and Northern Oil and Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sanchez Energy	2.22%	-18.15%	3.09%
Northern Oil and Gas	33.44%	27.52%	12.28%

Valuation & Earnings

This table compares Sanchez Energy and Northern Oil and Gas”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sanchez Energy	$1.06 billion	0.01	$85.21 million	N/A	N/A
Northern Oil and Gas	$2.17 billion	1.92	$922.97 million	$8.33	5.01

Northern Oil and Gas has higher revenue and earnings than Sanchez Energy.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sanchez Energy and Northern Oil and Gas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sanchez Energy	0	0	0	0	0.00
Northern Oil and Gas	0	3	7	1	2.82

Northern Oil and Gas has a consensus target price of $47.50, indicating a potential upside of 13.83%. Given Northern Oil and Gas’ stronger consensus rating and higher possible upside, analysts plainly believe Northern Oil and Gas is more favorable than Sanchez Energy.

Insider & Institutional Ownership

0.6% of Sanchez Energy shares are owned by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are owned by institutional investors. 11.1% of Sanchez Energy shares are owned by insiders. Comparatively, 2.8% of Northern Oil and Gas shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Northern Oil and Gas beats Sanchez Energy on 12 of the 13 factors compared between the two stocks.

About Sanchez Energy

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of onshore unconventional oil and natural gas resources in the United States. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2018, the company had assembled approximately 271,000 net acres in the Eagle Ford Shale; and owned approximately 34,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered in Houston, Texas.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.