Financial Review: Newfield Exploration (NFX) versus Black Stone Minerals, L.P. (BSM)
Newfield Exploration (NYSE: NFX) and Black Stone Minerals, L.P. (NYSE:BSM) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitabiliy, valuation and risk.
Risk and Volatility
Newfield Exploration has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Black Stone Minerals, L.P. has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Newfield Exploration and Black Stone Minerals, L.P., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Stone Minerals, L.P.||0||1||2||0||2.67|
Newfield Exploration currently has a consensus target price of $42.77, indicating a potential upside of 60.80%. Black Stone Minerals, L.P. has a consensus target price of $18.33, indicating a potential upside of 12.13%. Given Newfield Exploration’s stronger consensus rating and higher possible upside, equities analysts clearly believe Newfield Exploration is more favorable than Black Stone Minerals, L.P..
Black Stone Minerals, L.P. pays an annual dividend of $1.15 per share and has a dividend yield of 7.0%. Newfield Exploration does not pay a dividend. Black Stone Minerals, L.P. pays out 138.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Newfield Exploration and Black Stone Minerals, L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Stone Minerals, L.P.||22.71%||12.98%||7.88%|
Insider and Institutional Ownership
99.1% of Newfield Exploration shares are held by institutional investors. Comparatively, 24.8% of Black Stone Minerals, L.P. shares are held by institutional investors. 0.5% of Newfield Exploration shares are held by insiders. Comparatively, 24.3% of Black Stone Minerals, L.P. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Newfield Exploration and Black Stone Minerals, L.P.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Newfield Exploration||$1.63 billion||3.25||$903.00 million||$1.53||17.39|
|Black Stone Minerals, L.P.||$301.03 million||10.49||$189.73 million||$0.83||19.70|
Newfield Exploration has higher revenue and earnings than Black Stone Minerals, L.P.. Newfield Exploration is trading at a lower price-to-earnings ratio than Black Stone Minerals, L.P., indicating that it is currently the more affordable of the two stocks.
Newfield Exploration beats Black Stone Minerals, L.P. on 10 of the 15 factors compared between the two stocks.
About Newfield Exploration
Newfield Exploration Company is an independent exploration and production company. It is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. Its operating segments are the United States and China. Its the United States operations are onshore and focus primarily on large scale, liquids resource plays. Its principal areas of operation are the Anadarko and Arkoma basins of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of Utah. It has oil producing assets offshore China. As of December 31, 2016, its proved reserves of 513 million barrels of oil equivalents (MMBOE) consisted of 304 MMBOE proved developed producing, 10 MMBOE proved developed non-producing and 199 MMBOE proved undeveloped reserves. As of December 31, 2016, its proved liquids reserves were 285 million barrels of crude oil or other liquid hydrocarbons. As of December 31, 2016, 67% of its proved liquids reserves were crude oil or condensate.
About Black Stone Minerals, L.P.
Black Stone Minerals, L.P. is an owner of oil and natural gas mineral interests in the United States. The Company’s principal business is maximizing the value of its existing portfolio of mineral and royalty assets through active management and expanding its asset base through acquisitions of additional mineral and royalty interests. As of December 31, 2016, it owned mineral interests in approximately 15.5 million acres, with an average 45.7% ownership interest in that acreage. As of December 31, 2016, it also owned nonparticipating royalty interests in 1.5 million acres and overriding royalty interests in 1.5 million acres. As of December 31, 2016, these non-cost-bearing interests, which it referred to collectively as its mineral and royalty interests, included ownership in 50,000 producing wells. As of December 31, 2016, its mineral and royalty interests were located in 41 states and in 64 onshore basins in the continental United States.
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