Cloud Peak Energy (NYSE: CLD) and Foresight Energy (NYSE:FELP) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitabiliy, institutional ownership and valuation.
Volatility & Risk
Cloud Peak Energy has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Foresight Energy has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.
This table compares Cloud Peak Energy and Foresight Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cloud Peak Energy||-0.47%||0.55%||0.30%|
This is a summary of recent ratings and recommmendations for Cloud Peak Energy and Foresight Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cloud Peak Energy||0||7||2||0||2.22|
Cloud Peak Energy currently has a consensus price target of $5.29, suggesting a potential upside of 57.78%. Foresight Energy has a consensus price target of $5.25, suggesting a potential upside of 20.14%. Given Cloud Peak Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Cloud Peak Energy is more favorable than Foresight Energy.
Valuation and Earnings
This table compares Cloud Peak Energy and Foresight Energy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cloud Peak Energy||$841.33 million||0.30||$118.87 million||($0.03)||-111.63|
|Foresight Energy||$940.14 million||0.65||$180.74 million||($1.90)||-2.30|
Foresight Energy has higher revenue and earnings than Cloud Peak Energy. Cloud Peak Energy is trading at a lower price-to-earnings ratio than Foresight Energy, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
81.5% of Cloud Peak Energy shares are held by institutional investors. Comparatively, 11.5% of Foresight Energy shares are held by institutional investors. 2.5% of Cloud Peak Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Cloud Peak Energy beats Foresight Energy on 10 of the 13 factors compared between the two stocks.
Cloud Peak Energy Company Profile
Cloud Peak Energy Inc. is a producer of coal in the United States of America and the Powder River Basin (PRB). In the PRB, the Company owns and operates three surface coal mines: the Antelope Mine, the Cordero Rojo Mine and the Spring Creek Mine. Its segments include Owned and Operated Mines, and Logistics and Related Activities. Its Owned and Operated Mines segment includes its Antelope Mine, Cordero Rojo Mine, and Spring Creek Mine. The Logistics and Related Activities segment includes the services it provides to its international and certain of its domestic customers where it delivers coal to the customer at a terminal or the customer’s plant or other delivery point, remote from its mine site. As of December 31, 2016, the Company also operated two development projects, both located in the Northern PRB: Youngs Creek Project and Big Metal Project. The Company’s Antelope Mine and Cordero Rojo Mine are located in Wyoming and its Spring Creek Mine is located in Montana.
Foresight Energy Company Profile
Foresight Energy LP is engaged in the mining and marketing of coal from reserves and operations located in the Illinois Basin. As of December 31, 2016, the Company controlled 2.1 billion tons of coal in the state of Illinois. Its reserves consist principally of three contiguous blocks of uniform, thick, high heat content (high Btu) thermal coal, which are used for longwall operations. The Company operates four underground mining complexes in the Illinois Basin, including Williamson, Sugar Camp, Hillsboro and Macoupin. Its mining complexes operate in the Illinois Basin with approximately two located in Southern Illinois and over two located in Central Illinois. Williamson, Sugar Camp and Hillsboro are longwall operations, and Macoupin is a continuous miner operation. The Company markets and sells its coal to electric utility and industrial companies in the eastern half of the United States as well as internationally (primarily into Europe).
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