Frontline (NYSE:FRO – Get Free Report) and Magnolia Oil & Gas (NYSE:MGY – Get Free Report) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.
Institutional & Insider Ownership
22.7% of Frontline shares are owned by institutional investors. Comparatively, 94.7% of Magnolia Oil & Gas shares are owned by institutional investors. 48.1% of Frontline shares are owned by insiders. Comparatively, 0.9% of Magnolia Oil & Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility & Risk
Frontline has a beta of 0.05, suggesting that its stock price is 95% less volatile than the S&P 500. Comparatively, Magnolia Oil & Gas has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Frontline | $2.71 billion | 3.92 | $379.08 million | $6.67 | 7.16 |
| Magnolia Oil & Gas | $1.31 billion | 4.35 | $325.25 million | $2.28 | 10.57 |
Frontline has higher revenue and earnings than Magnolia Oil & Gas. Frontline is trading at a lower price-to-earnings ratio than Magnolia Oil & Gas, indicating that it is currently the more affordable of the two stocks.
Dividends
Frontline pays an annual dividend of $10.44 per share and has a dividend yield of 21.9%. Magnolia Oil & Gas pays an annual dividend of $0.72 per share and has a dividend yield of 3.0%. Frontline pays out 156.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magnolia Oil & Gas pays out 31.6% of its earnings in the form of a dividend. Magnolia Oil & Gas has raised its dividend for 3 consecutive years.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Frontline and Magnolia Oil & Gas, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Frontline | 2 | 5 | 4 | 0 | 2.18 |
| Magnolia Oil & Gas | 0 | 5 | 11 | 2 | 2.83 |
Frontline currently has a consensus price target of $45.37, suggesting a potential downside of 5.00%. Magnolia Oil & Gas has a consensus price target of $31.81, suggesting a potential upside of 31.96%. Given Magnolia Oil & Gas’ stronger consensus rating and higher possible upside, analysts plainly believe Magnolia Oil & Gas is more favorable than Frontline.
Profitability
This table compares Frontline and Magnolia Oil & Gas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Frontline | 49.47% | 44.24% | 20.89% |
| Magnolia Oil & Gas | 28.77% | 21.04% | 14.46% |
Summary
Magnolia Oil & Gas beats Frontline on 10 of the 18 factors compared between the two stocks.
About Frontline
Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.
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.
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