Critical Analysis: Extraction Oil & Gas (OTCMKTS:XOGAQ) & EQT (NYSE:EQT)

Extraction Oil & Gas (OTCMKTS:XOGAQ – Get Rating) and EQT (NYSE:EQT – Get Rating) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Institutional and Insider Ownership

38.6% of Extraction Oil & Gas shares are owned by institutional investors. Comparatively, 97.6% of EQT shares are owned by institutional investors. 6.0% of Extraction Oil & Gas shares are owned by insiders. Comparatively, 0.5% of EQT shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Extraction Oil & Gas and EQT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extraction Oil & Gas	0	0	0	0	N/A
EQT	0	3	15	0	2.83

EQT has a consensus price target of $52.59, suggesting a potential upside of 79.05%. Given EQT’s higher probable upside, analysts plainly believe EQT is more favorable than Extraction Oil & Gas.

Risk & Volatility

Extraction Oil & Gas has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, EQT has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Earnings & Valuation

This table compares Extraction Oil & Gas and EQT’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extraction Oil & Gas	$906.64 million	0.01	-$1.39 billion	($0.46)	-0.13
EQT	$7.50 billion	1.41	$1.77 billion	$4.11	7.15

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

Profitability

This table compares Extraction Oil & Gas and EQT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extraction Oil & Gas	-223.86%	-56.20%	-11.52%
EQT	N/A	13.23%	5.63%

Summary

EQT beats Extraction Oil & Gas on 11 of the 13 factors compared between the two stocks.

About Extraction Oil & Gas

(Get Rating)

Extraction Oil & Gas, Inc., an independent oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquid reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg (DJ) Basin of Colorado. The company also engages in the construction and support of midstream assets to gather, process, and produce crude oil and gas. As of December 31, 2019, it had approximately 169,900 net acres of contiguous acreage blocks in the productive areas of the DJ Basin; held approximately 125,500 net acres outside of the Core DJ Basin; had estimated proved reserves of approximately 254.1 MMBoe; and had 1,509 gross producing wells. The company was founded in 2012 and is headquartered in Denver, Colorado. On June 14, 2020, Extraction Oil & Gas, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About EQT

(Get Rating)

EQT Corp. is a natural gas production company, which engages in the supply, transmission, and distribution of natural gas. The company was founded in 1888 and is headquartered in Pittsburgh, PA.