Analyzing Range Resources (NYSE:RRC) and EQT (NYSE:EQT)

Range Resources (NYSE:RRC) and EQT (NYSE:EQT) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Dividends

Range Resources pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. EQT pays an annual dividend of $0.63 per share and has a dividend yield of 1.1%. Range Resources pays out 32.1% of its earnings in the form of a dividend. EQT pays out 110.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Range Resources has increased its dividend for 1 consecutive years and EQT has increased its dividend for 3 consecutive years. EQT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Range Resources and EQT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Range Resources	1	12	7	1	2.38
EQT	1	4	13	0	2.67

Range Resources currently has a consensus target price of $41.95, suggesting a potential upside of 1.48%. EQT has a consensus target price of $57.39, suggesting a potential downside of 3.19%. Given Range Resources’ higher probable upside, equities analysts clearly believe Range Resources is more favorable than EQT.

Volatility and Risk

Range Resources has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, EQT has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Valuation & Earnings

This table compares Range Resources and EQT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Range Resources	$2.42 billion	4.09	$266.34 million	$1.12	36.91
EQT	$5.27 billion	6.73	$230.58 million	$0.57	104.00

Range Resources has higher earnings, but lower revenue than EQT. Range Resources 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 Range Resources and EQT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Range Resources	11.02%	15.10%	8.06%
EQT	6.59%	5.52%	3.23%

Institutional and Insider Ownership

98.9% of Range Resources shares are held by institutional investors. Comparatively, 90.8% of EQT shares are held by institutional investors. 1.0% of Range Resources shares are held by company insiders. Comparatively, 0.7% of EQT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Range Resources beats EQT on 10 of the 18 factors compared between the two stocks.

About Range Resources

Range Resources Corporation operates as an independent natural gas, natural gas liquids (NGLs), crude oil, and condensate company in the United States. The company engages in the exploration, development, and acquisition of natural gas and crude oil properties located in the Appalachian region. It sells natural gas to utilities, marketing and midstream companies, and industrial users; NGLs to petrochemical end users, marketers/traders, and natural gas processors; and oil and condensate to crude oil processors, transporters, and refining and marketing companies. The company was formerly known as Lomak Petroleum Inc. and changed its name to Range Resources Corporation in August 1998. Range Resources Corporation was founded in 1976 and is headquartered in Fort Worth, Texas.

About EQT

EQT Corporation operates as a natural gas production company in the United States. The company sells natural gas and natural gas liquids to marketers, utilities, and industrial customers through pipelines located in the Appalachian Basin. It also offers marketing services and contractual pipeline capacity management services. The company was formerly known as Equitable Resources Inc. and changed its name to EQT Corporation in February 2009. EQT Corporation was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania.