Critical Analysis: Magnolia Oil & Gas (NYSE:MGY) & Comstock Resources (NYSE:CRK)

Magnolia Oil & Gas (NYSE:MGY) and Comstock Resources (NYSE:CRK) are both mid-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Analyst Ratings

This is a summary of recent ratings for Magnolia Oil & Gas and Comstock Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnolia Oil & Gas	2	6	6	0	2.29
Comstock Resources	3	6	2	0	1.91

Magnolia Oil & Gas currently has a consensus target price of $26.50, suggesting a potential upside of 22.08%. Comstock Resources has a consensus target price of $20.60, suggesting a potential downside of 12.56%. Given Magnolia Oil & Gas’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Magnolia Oil & Gas is more favorable than Comstock Resources.

Institutional and Insider Ownership

94.7% of Magnolia Oil & Gas shares are held by institutional investors. Comparatively, 36.1% of Comstock Resources shares are held by institutional investors. 1.2% of Magnolia Oil & Gas shares are held by company insiders. Comparatively, 2.2% of Comstock Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnolia Oil & Gas	$1.32 billion	3.11	$366.03 million	$1.79	12.13
Comstock Resources	$1.25 billion	5.51	-$229.65 million	$0.25	94.24

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

Volatility and Risk

Magnolia Oil & Gas has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Comstock Resources has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magnolia Oil & Gas	25.90%	18.10%	12.56%
Comstock Resources	3.14%	6.71%	2.45%

Summary

Magnolia Oil & Gas beats Comstock Resources on 11 of the 14 factors compared between the two stocks.

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.

About Comstock Resources

Comstock Resources, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. Its assets are located in the Haynesville and Bossier shales located in North Louisiana and East Texas. The company was incorporated in 1919 and is headquartered in Frisco, Texas. Comstock Resources, Inc. is a subsidiary of Arkoma Drilling, L.P.