Comparing SM Energy (NYSE:SM) and Mexco Energy (NYSE:MXC)

Mexco Energy (NYSE:MXC) and SM Energy (NYSE:SM) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mexco Energy	$6.93 million	3.72	$1.35 million	$0.57	22.12
SM Energy	$2.44 billion	2.05	$817.88 million	$7.16	6.13

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

Institutional and Insider Ownership

5.9% of Mexco Energy shares are held by institutional investors. Comparatively, 94.6% of SM Energy shares are held by institutional investors. 53.0% of Mexco Energy shares are held by insiders. Comparatively, 1.5% of SM Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Mexco Energy and SM Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mexco Energy	17.59%	6.94%	6.37%
SM Energy	33.89%	19.62%	10.87%

Risk & Volatility

Mexco Energy has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, SM Energy has a beta of 4.14, suggesting that its share price is 314% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Mexco Energy and SM Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mexco Energy	0	0	0	0	0.00
SM Energy	0	6	6	1	2.62

SM Energy has a consensus target price of $51.90, indicating a potential upside of 18.33%. Given SM Energy’s stronger consensus rating and higher possible upside, analysts plainly believe SM Energy is more favorable than Mexco Energy.

Summary

SM Energy beats Mexco Energy on 12 of the 15 factors compared between the two stocks.

About Mexco Energy

Mexco Energy Corporation, an independent oil and gas company, engages in the acquisition, exploration, development, and production of natural gas, crude oil, condensate, and natural gas liquids in the United States. It owns partial interests in approximately 6,400 gross producing wells located in the states of Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Wyoming, Kansas, Colorado, Montana, Virginia, North Dakota, and Ohio. It also owned leasehold mineral, royalty, and other interests in approximately 2,768 net acres. The company was formerly known as Miller Oil Company and changed its name to Mexco Energy Corporation in April 1980. Mexco Energy Corporation was incorporated in 1972 and is based in Midland, Texas.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.