Head-To-Head Survey: Pioneer Natural Resources (PXD) versus Cabot Oil & Gas Corporation (COG)

Pioneer Natural Resources (NYSE: PXD) and Cabot Oil & Gas Corporation (NYSE:COG) are both large-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for Pioneer Natural Resources and Cabot Oil & Gas Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pioneer Natural Resources 0 3 18 0 2.86
Cabot Oil & Gas Corporation 0 8 11 0 2.58

Pioneer Natural Resources currently has a consensus target price of $201.28, suggesting a potential upside of 33.59%. Cabot Oil & Gas Corporation has a consensus target price of $28.94, suggesting a potential upside of 14.12%. Given Pioneer Natural Resources’ stronger consensus rating and higher possible upside, equities analysts clearly believe Pioneer Natural Resources is more favorable than Cabot Oil & Gas Corporation.

Risk & Volatility

Pioneer Natural Resources has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Cabot Oil & Gas Corporation has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Earnings & Valuation

This table compares Pioneer Natural Resources and Cabot Oil & Gas Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pioneer Natural Resources $4.89 billion 5.24 $1.79 billion $0.98 153.74
Cabot Oil & Gas Corporation $1.59 billion 7.38 $881.72 million ($0.37) -68.54

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

Dividends

Pioneer Natural Resources pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Cabot Oil & Gas Corporation pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Pioneer Natural Resources pays out 8.2% of its earnings in the form of a dividend. Cabot Oil & Gas Corporation pays out -54.1% 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. Cabot Oil & Gas Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Pioneer Natural Resources and Cabot Oil & Gas Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pioneer Natural Resources 3.10% 1.79% 1.15%
Cabot Oil & Gas Corporation -10.95% 4.68% 2.39%

Insider and Institutional Ownership

91.6% of Pioneer Natural Resources shares are owned by institutional investors. Comparatively, 96.3% of Cabot Oil & Gas Corporation shares are owned by institutional investors. 0.9% of Pioneer Natural Resources shares are owned by insiders. Comparatively, 1.6% of Cabot Oil & Gas Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Pioneer Natural Resources beats Cabot Oil & Gas Corporation on 9 of the 16 factors compared between the two stocks.

About Pioneer Natural Resources

Pioneer Natural Resources Company is an oil and gas exploration and production company. The Company explores for, develops and produces oil, natural gas liquids (NGLs) and gas within the United States, with operations primarily in the Permian Basin in West Texas, the Eagle Ford Shale play in South Texas, the Raton field in southeast Colorado and the West Panhandle field in the Texas Panhandle. As of December 31, 2016, the Company owned interests in eight gas processing plants and nine treating facilities. As of December 31, 2016, its Spraberry/Wolfcamp field covered approximately 800,000 gross acres (690,000 net acres). The Company completed 12 Eagle Ford Shale wells during the fiscal year ended December 31, 2016. As of December 31, 2016, the Company owned approximately 185,000 gross acres (165,000 net acres) in the center of the Raton Basin. As of December 31, 2016, the Company’s gas had an average energy content of 1,400 British thermal unit (Btu).

About Cabot Oil & Gas Corporation

Cabot Oil & Gas Corporation is an independent oil and gas company engaged in the development, exploitation and exploration of oil and gas properties. The Company operates in the segment of natural gas and oil development, exploitation, exploration and production, in the continental United States. Its assets are concentrated in areas with known hydrocarbon resources, which are conducive to multi-well, repeatable drilling programs. As of December 31, 2016, its exploration, development and production operations were primarily concentrated in two unconventional plays: the Marcellus Shale in northeast Pennsylvania and the Eagle Ford Shale in south Texas. The Company also has operations in various other unconventional and conventional plays throughout the continental United States. Its Marcellus Shale properties are principally located in Susquehanna County, Pennsylvania. Its properties in the Eagle Ford Shale are principally located in Atascosa, Frio and La Salle Counties, Texas.

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