Critical Review: Evolution Petroleum (NYSE:EPM) & Sundance Energy Australia (OTCMKTS:SDCJF)

Evolution Petroleum (NYSE:EPM) and Sundance Energy Australia (OTCMKTS:SDCJF) are both small-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Profitability

This table compares Evolution Petroleum and Sundance Energy Australia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evolution Petroleum	2.04%	2.42%	1.20%
Sundance Energy Australia	24.02%	13.45%	6.16%

Institutional and Insider Ownership

60.1% of Evolution Petroleum shares are held by institutional investors. 10.1% of Evolution Petroleum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Evolution Petroleum and Sundance Energy Australia”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evolution Petroleum	$86.42 million	1.97	$4.08 million	$0.05	99.60
Sundance Energy Australia	$164.93 million	0.06	-$28.14 million	N/A	N/A

Evolution Petroleum has higher earnings, but lower revenue than Sundance Energy Australia.

Analyst Ratings

This is a summary of recent ratings and price targets for Evolution Petroleum and Sundance Energy Australia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evolution Petroleum	0	0	1	1	3.50
Sundance Energy Australia	0	0	0	0	0.00

Evolution Petroleum currently has a consensus price target of $6.50, indicating a potential upside of 30.52%. Given Evolution Petroleum’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Evolution Petroleum is more favorable than Sundance Energy Australia.

Risk and Volatility

Evolution Petroleum has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Sundance Energy Australia has a beta of 3.96, suggesting that its share price is 296% more volatile than the S&P 500.

Summary

Evolution Petroleum beats Sundance Energy Australia on 8 of the 13 factors compared between the two stocks.

About Evolution Petroleum

Evolution Petroleum Corporation, an energy company, engages in the development, production, ownership, and exploitation of onshore oil and gas properties in the United States. The company holds a non-operated interests in the SCOOP and STACK plays located in Central Oklahoma; the Chaveroo Field situated in Chaves and Roosevelt Counties, New Mexico; the Jonah Field located in Sublette County, Wyoming; the Williston Basin situated in Williston, North Dakota; the Barnett Shale field located in North Texas; the Hamilton Dome situated in Hot Springs County, Wyoming; and the Delhi Field, an onshore CO2-EOR project located in northeast Louisiana in Franklin, Madison, and Richland Parishes, as well as small overriding royalty interests in four onshore central Texas wells. The company was founded in 2003 and is based in Houston, Texas.

About Sundance Energy Australia

Sundance Energy Australia Limited operates as an onshore oil and gas company in the United States. The company explores for, develops, and produces oil and natural gas. Its exploration and development activities are focused on the Eagle Ford project in the South-Texas-Gulf Coast Basin. Sundance Energy Australia Limited was incorporated in 2004 and is based in Wayville, Australia.