Matador Resources (NYSE:MTDR – Get Free Report) and FutureFuel (NYSE:FF – Get Free Report) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Profitability
This table compares Matador Resources and FutureFuel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Matador Resources | 18.60% | 14.53% | 7.06% |
| FutureFuel | -19.94% | -19.75% | -15.47% |
Institutional and Insider Ownership
92.0% of Matador Resources shares are owned by institutional investors. Comparatively, 44.6% of FutureFuel shares are owned by institutional investors. 5.9% of Matador Resources shares are owned by insiders. Comparatively, 42.6% of FutureFuel shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Dividends
Matador Resources pays an annual dividend of $1.50 per share and has a dividend yield of 3.0%. FutureFuel pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. Matador Resources pays out 25.7% of its earnings in the form of a dividend. FutureFuel pays out -5.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Matador Resources has raised its dividend for 4 consecutive years. Matador Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Matador Resources and FutureFuel”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Matador Resources | $3.70 billion | 1.69 | $759.22 million | $5.83 | 8.64 |
| FutureFuel | $95.74 million | 2.58 | -$49.40 million | ($0.70) | -8.04 |
Matador Resources has higher revenue and earnings than FutureFuel. FutureFuel is trading at a lower price-to-earnings ratio than Matador Resources, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Matador Resources and FutureFuel, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Matador Resources | 0 | 4 | 12 | 0 | 2.75 |
| FutureFuel | 1 | 0 | 0 | 0 | 1.00 |
Matador Resources presently has a consensus target price of $68.43, suggesting a potential upside of 35.87%. Given Matador Resources’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Matador Resources is more favorable than FutureFuel.
Risk and Volatility
Matador Resources has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, FutureFuel has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.
Summary
Matador Resources beats FutureFuel on 14 of the 17 factors compared between the two stocks.
About Matador Resources
Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.
About FutureFuel
FutureFuel Corp., together with its subsidiaries, manufactures and sells diversified chemical, bio-based fuel, and bio-based specialty chemical products in the United States. The company operates through two segments, Chemicals and Biofuels. The Chemicals segment provides various custom chemicals that are used in the coatings, chemical intermediates, industrial and consumer cleaning, oil and gas, and specialty polymers industries; and performance chemicals, such as polymer modifiers, glycerin products, and various specialty chemicals and solvents. The Biofuels segment is involved in the production and sale of biodiesel and petrodiesel blends; and markets its biodiesel products directly to customers through trucks, barges, and rail cars. FutureFuel Corp. is headquartered in Saint Louis, Missouri.
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