Head-To-Head Comparison: W&T Offshore (WTI) and Sanchez Energy Corporation (SN)

Sanchez Energy Corporation (NYSE: SN) and W&T Offshore (NYSE:WTI) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Institutional & Insider Ownership

76.2% of Sanchez Energy Corporation shares are held by institutional investors. Comparatively, 46.7% of W&T Offshore shares are held by institutional investors. 14.7% of Sanchez Energy Corporation shares are held by company insiders. Comparatively, 32.6% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Sanchez Energy Corporation and W&T Offshore, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sanchez Energy Corporation 2 3 7 0 2.42
W&T Offshore 1 2 0 0 1.67

Sanchez Energy Corporation presently has a consensus price target of $12.86, indicating a potential upside of 166.88%. W&T Offshore has a consensus price target of $2.63, indicating a potential upside of 33.25%. Given Sanchez Energy Corporation’s stronger consensus rating and higher possible upside, equities analysts clearly believe Sanchez Energy Corporation is more favorable than W&T Offshore.

Valuation & Earnings

This table compares Sanchez Energy Corporation and W&T Offshore’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sanchez Energy Corporation $550.09 million 0.67 $297.41 million ($0.33) -14.61
W&T Offshore $468.38 million 0.58 $252.78 million $1.01 1.95

Sanchez Energy Corporation has higher revenue and earnings than W&T Offshore. Sanchez Energy Corporation is trading at a lower price-to-earnings ratio than W&T Offshore, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Sanchez Energy Corporation has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 2.4, suggesting that its share price is 140% more volatile than the S&P 500.

Profitability

This table compares Sanchez Energy Corporation and W&T Offshore’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sanchez Energy Corporation 7.65% N/A -3.28%
W&T Offshore 25.52% -6.08% 4.60%

Summary

Sanchez Energy Corporation beats W&T Offshore on 8 of the 13 factors compared between the two stocks.

Sanchez Energy Corporation Company Profile

Sanchez Energy Corporation is an independent exploration and production company. The Company is focused on the acquisition and development of the United States onshore unconventional oil and natural gas resources. The Company primarily focuses on the Eagle Ford Shale in South Texas. The Company also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2016, it had assembled approximately 278,000 net leasehold acres in the Eagle Ford Shale. As of December 31, 2016, it had 473 net wells in the Eagle Ford Shale area. In its Catarina area, the Company had approximately 106,000 net acres in Dimmit, LaSalle and Webb Counties, Texas, at December 31, 2016. In its Maverick area, it had approximately 100,000 net acres in Dimmit, Frio, LaSalle, Zavala and McMullen Counties, Texas, at December 31, 2016. In its Javelina area, it had approximately 39,500 net acres in LaSalle and Webb Counties, Texas, at December 31, 2016.

W&T Offshore Company Profile

W&T Offshore, Inc. is an independent oil and natural gas producer. The Company is engaged in the exploration, development and acquisition of oil and natural gas properties in the Gulf of Mexico. As of December 31, 2016, the Company had interests in offshore leases covering approximately 750,000 gross acres (450,000 net acres) spanning across the Outer Continental Shelf (OCS) off the coasts of Louisiana, Texas, Mississippi and Alabama. Its producing fields are located in federal and state waters in the Gulf of Mexico in water depths ranging from less than 10 feet up to 7,300 feet. Its fields include Ship Shoal 349 Field (Mahogany), Fairway Field, Viosca Knoll 783 Field (Viosca Knoll 783 (Tahoe) and Viosca Knoll 784 (SE Tahoe)), Mississippi Canyon 782 Field (Dantzler), Mississippi Canyon 698 Field (Big Bend), Mississippi Canyon 243 Field (Matterhorn), Ewing Bank 910, Brazos A-133 Field and Viosca Knoll 823 Field (Virgo).

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