Analyzing Legacy Reserves (OTCMKTS:LGCYQ) and APA (NASDAQ:APA)

Legacy Reserves (OTCMKTS:LGCYQ) and APA (NASDAQ:APA) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Earnings and Valuation

This table compares Legacy Reserves and APA”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Legacy Reserves	N/A	N/A	N/A	N/A	N/A
APA	$10.06 billion	0.87	$804.00 million	$2.99	8.17

APA has higher revenue and earnings than Legacy Reserves.

Profitability

This table compares Legacy Reserves and APA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Legacy Reserves	N/A	N/A	N/A
APA	10.53%	20.98%	7.21%

Institutional and Insider Ownership

83.0% of APA shares are owned by institutional investors. 0.8% of Legacy Reserves shares are owned by insiders. Comparatively, 0.7% of APA shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Legacy Reserves and APA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Legacy Reserves	0	0	0	0	0.00
APA	3	14	3	0	2.00

APA has a consensus target price of $23.78, indicating a potential downside of 2.63%. Given APA’s stronger consensus rating and higher probable upside, analysts plainly believe APA is more favorable than Legacy Reserves.

Summary

APA beats Legacy Reserves on 8 of the 9 factors compared between the two stocks.

About Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

About APA

APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.