Head to Head Review: Epsilon Energy (NASDAQ:EPSN) and REX American Resources (NYSE:REX)

REX American Resources (NYSE:REX) and Epsilon Energy (NASDAQ:EPSN) are both small-cap energy companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

REX American Resources has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Epsilon Energy has a beta of -0.06, suggesting that its stock price is 106% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for REX American Resources and Epsilon Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
REX American Resources	0	0	1	0	3.00
Epsilon Energy	0	1	0	0	2.00

Profitability

This table compares REX American Resources and Epsilon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
REX American Resources	18.31%	16.90%	15.01%
Epsilon Energy	-3.77%	5.56%	3.26%

Institutional & Insider Ownership

88.1% of REX American Resources shares are owned by institutional investors. Comparatively, 60.3% of Epsilon Energy shares are owned by institutional investors. 13.2% of REX American Resources shares are owned by insiders. Comparatively, 28.4% of Epsilon Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares REX American Resources and Epsilon Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
REX American Resources	$650.49 million	2.22	$82.95 million	$3.65	11.91
Epsilon Energy	$67.66 million	2.57	-$5.80 million	($0.21)	-27.33

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

Summary

REX American Resources beats Epsilon Energy on 11 of the 13 factors compared between the two stocks.

About REX American Resources

REX American Resources Corporation, together with its subsidiaries, produces and sells ethanol in the United States. The company also offers corn, distillers grains, ethanol, distillers corn oil, gasoline, and natural gas. In addition, it provides dry distillers grains with solubles, which is used as a protein in animal feed. The company was formerly known as REX Stores Corporation and changed its name to REX American Resources Corporation in 2010. REX American Resources Corporation was founded in 1980 and is headquartered in Dayton, Ohio.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.