Diamondback Energy (NASDAQ:FANG – Get Free Report) and Cheniere Energy (NYSE:LNG – Get Free Report) are both large-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.
Dividends
Diamondback Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.9%. Cheniere Energy pays an annual dividend of $2.00 per share and has a dividend yield of 0.9%. Diamondback Energy pays out 28.4% of its earnings in the form of a dividend. Cheniere Energy pays out 11.7% 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. Diamondback Energy has increased its dividend for 7 consecutive years. Diamondback Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent recommendations for Diamondback Energy and Cheniere Energy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Diamondback Energy | 0 | 1 | 21 | 2 | 3.04 |
| Cheniere Energy | 0 | 1 | 15 | 1 | 3.00 |
Risk & Volatility
Diamondback Energy has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.
Insider & Institutional Ownership
90.0% of Diamondback Energy shares are held by institutional investors. Comparatively, 87.3% of Cheniere Energy shares are held by institutional investors. 0.5% of Diamondback Energy shares are held by insiders. Comparatively, 0.3% of Cheniere Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Diamondback Energy and Cheniere Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Diamondback Energy | 27.25% | 9.48% | 5.63% |
| Cheniere Energy | 21.05% | 37.83% | 8.79% |
Earnings and Valuation
This table compares Diamondback Energy and Cheniere Energy”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Diamondback Energy | $11.07 billion | 3.59 | $3.34 billion | $14.07 | 9.76 |
| Cheniere Energy | $15.70 billion | 3.27 | $3.25 billion | $17.13 | 13.64 |
Diamondback Energy has higher earnings, but lower revenue than Cheniere Energy. Diamondback Energy is trading at a lower price-to-earnings ratio than Cheniere Energy, indicating that it is currently the more affordable of the two stocks.
Summary
Diamondback Energy beats Cheniere Energy on 12 of the 18 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 Cheniere Energy
Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.
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