Analyzing Denbury Resources (DNR) & Unit (UNT)

Denbury Resources (NYSE: DNR) and Unit (NYSE:UNT) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Denbury Resources and Unit, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Denbury Resources 0 7 1 0 2.13
Unit 0 5 0 0 2.00

Denbury Resources presently has a consensus price target of $3.18, indicating a potential downside of 28.94%. Unit has a consensus price target of $25.00, indicating a potential downside of 3.96%. Given Unit’s higher probable upside, analysts clearly believe Unit is more favorable than Denbury Resources.

Valuation & Earnings

This table compares Denbury Resources and Unit’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Denbury Resources $1.13 billion 1.75 $163.15 million $0.14 32.00
Unit $739.64 million 1.90 $117.84 million $0.54 48.20

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

Insider & Institutional Ownership

78.5% of Denbury Resources shares are held by institutional investors. Comparatively, 92.3% of Unit shares are held by institutional investors. 1.1% of Denbury Resources shares are held by insiders. Comparatively, 3.3% of Unit shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Denbury Resources and Unit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Denbury Resources 14.77% 28.51% 3.95%
Unit 13.28% 2.96% 1.51%

Risk & Volatility

Denbury Resources has a beta of 3.22, meaning that its stock price is 222% more volatile than the S&P 500. Comparatively, Unit has a beta of 2.87, meaning that its stock price is 187% more volatile than the S&P 500.

Summary

Denbury Resources beats Unit on 8 of the 14 factors compared between the two stocks.

Denbury Resources Company Profile

Denbury Resources Inc. operates as an independent oil and natural gas company in the United States. It holds interests in various oil and natural gas properties located in Mississippi, Texas, Louisiana, and Alabama in the Gulf Coast region; and in Montana, North Dakota, and Wyoming in the Rocky Mountain region. As of December 31, 2017, the company had 259.7 million barrels of oil equivalent of estimated proved oil and natural gas reserves. Denbury Resources Inc. was founded in 1951 and is headquartered in Plano, Texas.

Unit Company Profile

Unit Corporation, together with its subsidiaries, operates as an oil and natural gas contract drilling company in the United States. The company operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. The Oil and Natural Gas segment acquires, explores, develops, and produces oil and natural gas properties, principally located in Oklahoma and Texas, as well as in Arkansas, Colorado, Kansas, Louisiana, Mississippi, Montana, New Mexico, North Dakota, Utah, and Wyoming. As of December 31, 2017, this segment had approximately 99 gross proved undeveloped wells. The Contract Drilling segment is involved in the land contract drilling of onshore oil and natural gas wells for its own account, as well as for a range of other oil and natural gas companies, primarily in Oklahoma, Texas, Wyoming, and North Dakota, as well as in Louisiana and Kansas. This segment operates 31 drilling rigs. The Mid-Stream segment buys, sells, gathers, transports, processes, and treats natural gas for third parties and for its own account. This segment operates 3 natural gas treatment plants, 13 processing plants, and 24 gathering systems, as well as approximately 1,455 miles of pipeline in Oklahoma, Texas, Kansas, Pennsylvania, and West Virginia. Unit Corporation was founded in 1963 and is based in Tulsa, Oklahoma.

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