Contrasting Panhandle Oil and Gas (PHX) & Parsley Energy (PE)

Panhandle Oil and Gas (NYSE:PHX) and Parsley Energy (NYSE:PE) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Valuation and Earnings

This table compares Panhandle Oil and Gas and Parsley Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Panhandle Oil and Gas $45.03 million 5.73 $14.63 million $0.34 45.47
Parsley Energy $1.83 billion 3.22 $369.13 million $1.41 13.16

Parsley Energy has higher revenue and earnings than Panhandle Oil and Gas. Parsley Energy is trading at a lower price-to-earnings ratio than Panhandle Oil and Gas, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Panhandle Oil and Gas has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Parsley Energy has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Insider and Institutional Ownership

60.5% of Panhandle Oil and Gas shares are held by institutional investors. Comparatively, 85.2% of Parsley Energy shares are held by institutional investors. 7.2% of Panhandle Oil and Gas shares are held by insiders. Comparatively, 13.2% of Parsley Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Panhandle Oil and Gas and Parsley Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Panhandle Oil and Gas 30.36% 6.93% 4.51%
Parsley Energy 20.21% 6.43% 4.31%

Analyst Ratings

This is a summary of recent recommendations and price targets for Panhandle Oil and Gas and Parsley Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Panhandle Oil and Gas 0 0 1 0 3.00
Parsley Energy 0 4 24 1 2.90

Panhandle Oil and Gas presently has a consensus price target of $4.50, indicating a potential downside of 70.89%. Parsley Energy has a consensus price target of $32.32, indicating a potential upside of 74.23%. Given Parsley Energy’s higher possible upside, analysts clearly believe Parsley Energy is more favorable than Panhandle Oil and Gas.

Dividends

Panhandle Oil and Gas pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Parsley Energy does not pay a dividend. Panhandle Oil and Gas pays out 47.1% of its earnings in the form of a dividend.

Summary

Parsley Energy beats Panhandle Oil and Gas on 9 of the 17 factors compared between the two stocks.

Panhandle Oil and Gas Company Profile

Panhandle Oil and Gas Inc. acquires, develops, and manages oil and natural gas properties in the United States. The company produces and sells natural gas, crude oil, and natural gas liquids. Its principal properties are located in Oklahoma, Arkansas, Texas, New Mexico, and North Dakota. As of September 30, 2018, the company owned perpetual ownership of 258,555 net mineral acres; leased 17,203 net acres; and held working interests and royalty interests in 6,079 producing oil and natural gas wells, as well as had 69 wells in the process of being drilled or completed. It sells its products to various purchasers, including pipeline and marketing companies. The company was founded in 1926 and is based in Oklahoma City, Oklahoma.

Parsley Energy Company Profile

Parsley Energy, Inc., an independent oil and natural gas company, engages in the acquisition, development, production, exploration, and sale of crude oil and natural gas properties in the Permian Basin in West Texas and Southeastern New Mexico. As of December 31, 2017, its acreage position consisted of 219,747 net acres, including 174,392 net acres in the Midland Basin and 45,355 net acres in the Delaware Basin; and 241.0 net producing horizontal wells and 731.5 net producing vertical wells, as well an estimated proved oil and natural gas reserves were 416.4 MMBoe. The company was founded in 2008 and is headquartered in Austin, Texas.

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