Contrasting Granite Ridge Resources (NYSE:GRNT) and Magnolia Oil & Gas (NYSE:MGY)

Granite Ridge Resources (NYSE:GRNT) and Magnolia Oil & Gas (NYSE:MGY) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Dividends

Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 8.3%. Magnolia Oil & Gas pays an annual dividend of $0.60 per share and has a dividend yield of 2.6%. Granite Ridge Resources pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magnolia Oil & Gas pays out 31.4% of its earnings in the form of a dividend. Magnolia Oil & Gas has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Granite Ridge Resources and Magnolia Oil & Gas”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Ridge Resources	$432.53 million	1.60	$18.76 million	$0.24	22.02
Magnolia Oil & Gas	$1.32 billion	3.38	$366.03 million	$1.91	12.21

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

Profitability

This table compares Granite Ridge Resources and Magnolia Oil & Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Ridge Resources	7.47%	13.09%	7.89%
Magnolia Oil & Gas	27.57%	19.34%	13.47%

Insider & Institutional Ownership

31.6% of Granite Ridge Resources shares are owned by institutional investors. Comparatively, 94.7% of Magnolia Oil & Gas shares are owned by institutional investors. 8.5% of Granite Ridge Resources shares are owned by insiders. Comparatively, 0.9% of Magnolia Oil & Gas 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.

Volatility and Risk

Granite Ridge Resources has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Magnolia Oil & Gas has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Granite Ridge Resources and Magnolia Oil & Gas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Ridge Resources	1	2	1	0	2.00
Magnolia Oil & Gas	2	7	5	0	2.21

Granite Ridge Resources currently has a consensus price target of $8.00, indicating a potential upside of 51.37%. Magnolia Oil & Gas has a consensus price target of $26.33, indicating a potential upside of 12.89%. Given Granite Ridge Resources’ higher probable upside, analysts plainly believe Granite Ridge Resources is more favorable than Magnolia Oil & Gas.

Summary

Magnolia Oil & Gas beats Granite Ridge Resources on 13 of the 17 factors compared between the two stocks.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.