Critical Survey: Eclipse Resources (ECR) vs. Laredo Petroleum (LPI)

Eclipse Resources (NYSE: ECR) and Laredo Petroleum (NYSE:LPI) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Risk and Volatility

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Eclipse Resources has a beta of 2.83, meaning that its share price is 183% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Eclipse Resources and Laredo Petroleum, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eclipse Resources 1 4 6 0 2.45
Laredo Petroleum 2 9 6 0 2.24

Eclipse Resources currently has a consensus price target of $3.25, indicating a potential upside of 144.36%. Laredo Petroleum has a consensus price target of $12.66, indicating a potential upside of 55.48%. Given Eclipse Resources’ stronger consensus rating and higher possible upside, equities analysts plainly believe Eclipse Resources is more favorable than Laredo Petroleum.

Earnings and Valuation

This table compares Eclipse Resources and Laredo Petroleum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eclipse Resources $383.66 million 1.05 $8.52 million ($0.04) -33.25
Laredo Petroleum $822.16 million 2.40 $548.97 million $0.60 13.57

Laredo Petroleum has higher revenue and earnings than Eclipse Resources. Eclipse Resources is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

80.7% of Eclipse Resources shares are held by institutional investors. 1.3% of Eclipse Resources shares are held by insiders. Comparatively, 1.4% of Laredo Petroleum shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Eclipse Resources and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eclipse Resources 2.22% -1.34% -0.64%
Laredo Petroleum 66.77% 30.02% 6.46%

Summary

Laredo Petroleum beats Eclipse Resources on 9 of the 13 factors compared between the two stocks.

About Eclipse Resources

Eclipse Resources Corporation, an independent exploration and production company, acquires and develops oil and natural gas properties in the Appalachian Basin. The company holds interests in the Utica Shale and Marcellus Shale areas. As of December 31, 2017, it had an acreage position approximately covering an area of 203,000 net acres in Eastern Ohio. The company's estimated proved reserves comprising 469.4 billion cubic feet of natural gas equivalent. Eclipse Resources Corporation was founded in 2011 and is headquartered in State College, Pennsylvania.

About Laredo Petroleum

Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.

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