Contrasting Diamondback Energy (NASDAQ:FANG) & Tullow Oil (OTCMKTS:TUWLF)

Diamondback Energy (NASDAQ:FANG) and Tullow Oil (OTCMKTS:TUWLF) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Analyst Ratings

This is a summary of recent recommendations for Diamondback Energy and Tullow Oil, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamondback Energy	0	5	15	4	2.96
Tullow Oil	0	0	0	0	0.00

Diamondback Energy currently has a consensus target price of $222.21, suggesting a potential upside of 12.41%. Given Diamondback Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Diamondback Energy is more favorable than Tullow Oil.

Earnings and Valuation

This table compares Diamondback Energy and Tullow Oil”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamondback Energy	$15.03 billion	3.68	$1.66 billion	$5.13	38.53
Tullow Oil	N/A	N/A	N/A	($0.22)	-1.22

Diamondback Energy has higher revenue and earnings than Tullow Oil. Tullow Oil is trading at a lower price-to-earnings ratio than Diamondback Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Diamondback Energy pays an annual dividend of $4.40 per share and has a dividend yield of 2.2%. Tullow Oil pays an annual dividend of $0.20 per share and has a dividend yield of 73.1%. Diamondback Energy pays out 85.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tullow Oil pays out -89.4% of its earnings in the form of a dividend. Diamondback Energy has increased its dividend for 7 consecutive years. Tullow Oil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

90.0% of Diamondback Energy shares are owned by institutional investors. Comparatively, 37.0% of Tullow Oil shares are owned by institutional investors. 0.6% of Diamondback Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Diamondback Energy and Tullow Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamondback Energy	8.58%	10.10%	6.16%
Tullow Oil	N/A	N/A	N/A

Summary

Diamondback Energy beats Tullow Oil on 13 of the 15 factors compared between the two stocks.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.

About Tullow Oil

Tullow Oil plc engages in the oil and gas exploration, development, and production activities primarily in Africa, Europe, and South America. The company was founded in 1985 and is headquartered in London, the United Kingdom.