Wildhorse Resource Development (NYSE: WRD) and Continental Resources (NYSE:CLR) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Wildhorse Resource Development and Continental Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wildhorse Resource Development 0 1 11 1 3.00
Continental Resources 1 6 17 0 2.67

Wildhorse Resource Development currently has a consensus price target of $20.82, suggesting a potential upside of 21.60%. Continental Resources has a consensus price target of $46.39, suggesting a potential downside of 1.99%. Given Wildhorse Resource Development’s stronger consensus rating and higher probable upside, research analysts plainly believe Wildhorse Resource Development is more favorable than Continental Resources.

Valuation and Earnings

This table compares Wildhorse Resource Development and Continental Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wildhorse Resource Development $127.34 million 13.60 -$47.07 million $0.45 38.04
Continental Resources $1.98 billion 8.97 -$399.67 million ($0.07) -676.14

Wildhorse Resource Development has higher earnings, but lower revenue than Continental Resources. Continental Resources is trading at a lower price-to-earnings ratio than Wildhorse Resource Development, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.7% of Wildhorse Resource Development shares are held by institutional investors. Comparatively, 22.6% of Continental Resources shares are held by institutional investors. 2.6% of Wildhorse Resource Development shares are held by company insiders. Comparatively, 76.9% of Continental Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Wildhorse Resource Development and Continental Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wildhorse Resource Development 8.88% 1.24% 0.68%
Continental Resources -0.95% 0.23% 0.07%

Summary

Wildhorse Resource Development beats Continental Resources on 10 of the 14 factors compared between the two stocks.

Wildhorse Resource Development Company Profile

WildHorse Resource Development Corporation is a holding company. The Company is an independent oil and natural gas company. The Company is focused on the acquisition, exploitation, exploration and development of oil, natural gas and natural gas liquid (NGL) resources in the United States. Its assets are characterized by concentrated acreage positions in Southeast Texas and North Louisiana with multiple producing stratigraphic horizons, or stacked pay zones, and single-well rates of return. In Southeast Texas, it operates in Burleson, Lee and Washington Counties where it primarily targets the Eagle Ford Shale (Eagle Ford Acreage), which is an active shale trends in North America. In North Louisiana, the Company operates in and around the Terryville Complex, where it primarily targets the overpressured Cotton Valley play (North Louisiana Acreage). The Company’s subsidiaries include WildHorse Resources II, LLC (WildHorse) and Esquisto and Acquisition Co.

Continental Resources Company Profile

Continental Resources, Inc. is a crude oil and natural gas company with properties in the North, South and East regions of the United States. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken and the Red River units. The South region includes properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province (SCOOP), Sooner Trend Anadarko Canadian Kingfisher (STACK), and Arkoma Woodford areas of Oklahoma. The East region is consists of undeveloped leasehold acreage east of the Mississippi River with no drilling or production operations. As of December 31, 2016, its estimated proved reserves were 1,275 million barrels of oil equivalent (MMBoe), with estimated proved developed reserves of 519 MMBoe. As of December 31, 2016, its average daily production from South region properties was 91,088 barrels of oil equivalent (Boe) per day.

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