Callon Petroleum (CPE) vs. EOG Resources (EOG) Critical Contrast

Callon Petroleum (NYSE: CPE) and EOG Resources (NYSE:EOG) are both mid-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Institutional and Insider Ownership

84.7% of EOG Resources shares are owned by institutional investors. 0.8% of Callon Petroleum shares are owned by insiders. Comparatively, 0.5% of EOG Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Callon Petroleum has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, EOG Resources has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Profitability

This table compares Callon Petroleum and EOG Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callon Petroleum 30.20% 4.05% 2.96%
EOG Resources 0.10% 1.73% 0.82%

Earnings & Valuation

This table compares Callon Petroleum and EOG Resources’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Callon Petroleum $200.85 million 10.62 -$91.81 million $0.43 24.58
EOG Resources $7.65 billion 7.54 -$1.10 billion $0.01 9,982.00

Callon Petroleum has higher revenue, but lower earnings than EOG Resources. Callon Petroleum is trading at a lower price-to-earnings ratio than EOG Resources, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Callon Petroleum and EOG Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callon Petroleum 0 2 21 0 2.91
EOG Resources 0 7 17 0 2.71

Callon Petroleum presently has a consensus price target of $17.50, indicating a potential upside of 65.56%. EOG Resources has a consensus price target of $109.95, indicating a potential upside of 10.15%. Given Callon Petroleum’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Callon Petroleum is more favorable than EOG Resources.

Dividends

EOG Resources pays an annual dividend of $0.67 per share and has a dividend yield of 0.7%. Callon Petroleum does not pay a dividend. EOG Resources pays out 6,700.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Callon Petroleum beats EOG Resources on 12 of the 16 factors compared between the two stocks.

About Callon Petroleum

Callon Petroleum Company is an independent oil and natural gas company. The Company is engaged in the exploration, development, acquisition and production of oil and natural gas properties. The Company focuses on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and southeastern New Mexico and consisted of three primary sub-basins: the Midland Basin, the Delaware Basin, and the Central Basin Platform as of December 31, 2016. The Company’s drilling activity focuses on the horizontal development of various prospective intervals in the Midland Basin, including multiple levels of the Wolfcamp formation and the Lower Spraberry shale. It owns additional immaterial properties in Louisiana. As of December 31, 2016, the Company had owned leaseholds in 39,570 net acres in the Permian Basin, all of which was located in the Midland Basin.

About EOG Resources

EOG Resources, Inc. explores for, develops, produces and markets crude oil and natural gas in major producing basins in the United States, The Republic of Trinidad and Tobago, the United Kingdom, The People’s Republic of China, Canada and, from time to time, select other international areas. Its operations are all crude oil and natural gas exploration and production related. As of December 31, 2016, its total estimated net proved reserves were over 2,147 million barrels of oil equivalent (MMBoe), of which over 1178 million barrels (MMBbl) were crude oil and condensate reserves, over 416 MMBbl were natural gas liquids reserves and over 3318 billion cubic feet, or 553 MMBoe, were natural gas reserves. Its operations are focused in the productive basins in the United States with a focus on crude oil and, to a lesser extent, liquids-rich natural gas plays. It has operations offshore Trinidad, in the United Kingdom East Irish Sea, in the China Sichuan Basin and in Canada.

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