Frontline (NYSE:FRO – Get Free Report) and Magnolia Oil & Gas (NYSE:MGY – Get Free Report) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Dividends
Frontline pays an annual dividend of $10.44 per share and has a dividend yield of 21.9%. Magnolia Oil & Gas pays an annual dividend of $0.72 per share and has a dividend yield of 3.0%. Frontline pays out 156.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magnolia Oil & Gas pays out 31.6% of its earnings in the form of a dividend. Magnolia Oil & Gas has raised its dividend for 3 consecutive years.
Analyst Recommendations
This is a summary of current ratings and target prices for Frontline and Magnolia Oil & Gas, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Frontline | 2 | 5 | 4 | 0 | 2.18 |
| Magnolia Oil & Gas | 0 | 5 | 11 | 2 | 2.83 |
Institutional & Insider Ownership
22.7% of Frontline shares are owned by institutional investors. Comparatively, 94.7% of Magnolia Oil & Gas shares are owned by institutional investors. 48.1% of Frontline shares are owned by company insiders. Comparatively, 0.9% of Magnolia Oil & Gas shares are owned by company 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 & Earnings
This table compares Frontline and Magnolia Oil & Gas”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Frontline | $2.71 billion | 3.92 | $379.08 million | $6.67 | 7.16 |
| Magnolia Oil & Gas | $1.31 billion | 4.35 | $325.25 million | $2.28 | 10.57 |
Frontline has higher revenue and earnings than Magnolia Oil & Gas. Frontline is trading at a lower price-to-earnings ratio than Magnolia Oil & Gas, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Frontline has a beta of 0.05, suggesting that its share price is 95% less volatile than the S&P 500. Comparatively, Magnolia Oil & Gas has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.
Profitability
This table compares Frontline and Magnolia Oil & Gas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Frontline | 49.47% | 44.24% | 20.89% |
| Magnolia Oil & Gas | 28.77% | 21.04% | 14.46% |
Summary
Magnolia Oil & Gas beats Frontline on 10 of the 18 factors compared between the two stocks.
About Frontline
Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.
About Magnolia Oil & Gas
Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.
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