Critical Analysis: Stratex Oil & Gas (OTCMKTS:STTX) & Talos Energy (NYSE:TALO)

Stratex Oil & Gas (OTCMKTS:STTX) and Talos Energy (NYSE:TALO) are both small-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Risk and Volatility

Stratex Oil & Gas has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, Talos Energy has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Valuation & Earnings

This table compares Stratex Oil & Gas and Talos Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stratex Oil & Gas	N/A	N/A	N/A	N/A	N/A
Talos Energy	$1.97 billion	0.81	-$76.39 million	($0.97)	-9.39

Stratex Oil & Gas has higher earnings, but lower revenue than Talos Energy.

Profitability

This table compares Stratex Oil & Gas and Talos Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stratex Oil & Gas	N/A	N/A	N/A
Talos Energy	-8.91%	-2.34%	-1.03%

Insider & Institutional Ownership

89.4% of Talos Energy shares are owned by institutional investors. 0.4% of Talos Energy shares are owned 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.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Stratex Oil & Gas and Talos Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stratex Oil & Gas	0	0	0	0	0.00
Talos Energy	1	2	5	0	2.50

Talos Energy has a consensus target price of $14.43, suggesting a potential upside of 58.47%. Given Talos Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Talos Energy is more favorable than Stratex Oil & Gas.

Summary

Talos Energy beats Stratex Oil & Gas on 7 of the 10 factors compared between the two stocks.

About Stratex Oil & Gas

Stratex Oil & Gas Holdings, Inc., an independent energy company, focuses on the acquisition, exploitation, and development of crude oil in Kansas and Texas, as well as non-operated working interests in North Dakota, Montana, Utah, Colorado, and Kansas. The company is also involved in the sale of oil and gas. The company was formerly known as Poway Muffler and Brake, Inc. and changed its name to Stratex Oil & Gas Holdings, Inc. in May 2012. Stratex Oil & Gas Holdings, Inc. is based in Salt Lake City, Utah.

About Talos Energy

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.