Critical Comparison: Green Plains (NASDAQ:GPRE) and Permian Resources (NYSE:PR)

Permian Resources (NYSE:PR) and Green Plains (NASDAQ:GPRE) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Profitability

This table compares Permian Resources and Green Plains’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Permian Resources	25.04%	15.56%	9.99%
Green Plains	10.87%	23.31%	12.06%

Analyst Ratings

This is a summary of recent recommendations and price targets for Permian Resources and Green Plains, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	0	2	15	5	3.14
Green Plains	0	3	2	1	2.67

Permian Resources currently has a consensus target price of $26.61, suggesting a potential upside of 22.29%. Green Plains has a consensus target price of $18.75, suggesting a potential upside of 36.76%. Given Green Plains’ higher probable upside, analysts plainly believe Green Plains is more favorable than Permian Resources.

Institutional & Insider Ownership

91.8% of Permian Resources shares are held by institutional investors. 5.0% of Permian Resources shares are held by insiders. Comparatively, 1.4% of Green Plains shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Permian Resources and Green Plains”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Resources	$5.07 billion	3.60	$935.17 million	$1.92	11.33
Green Plains	$2.09 billion	0.46	-$121.28 million	$2.45	5.60

Permian Resources has higher revenue and earnings than Green Plains. Green Plains is trading at a lower price-to-earnings ratio than Permian Resources, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Permian Resources has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Green Plains has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Summary

Permian Resources beats Green Plains on 10 of the 15 factors compared between the two stocks.

About Permian Resources

Permian Resources Corporation is an independent oil and natural gas company focused on the exploration, development and production of oil, natural gas and natural gas liquids. Its operations are concentrated in the Delaware Basin, part of the Permian Basin in West Texas and southeastern New Mexico. The company develops its acreage through drilling and related production activities, with a focus on operating and expanding its position in the Delaware Basin. Its production is sold into energy markets and used across a range of industrial and consumer applications.

About Green Plains

Green Plains Inc. is a U.S. agribusiness and renewable fuels company that produces low-carbon biofuels and agricultural ingredients. Founded in 2004, the company operates biorefineries primarily in the Midwest, where corn is processed into fuel-grade ethanol and related products. Its co-products include distillers grains, which are used in animal feed, and corn oil, which can be used in feed and renewable fuel applications. Green Plains also works to improve the efficiency and environmental performance of its production processes and develop higher-value ingredients from agricultural materials.