U.S. Energy (NASDAQ:USEG) and SM Energy (NASDAQ:SM) Critical Analysis

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U.S. Energy (NASDAQ:USEG) and SM Energy (NYSE:SM) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
U.S. Energy -15.20% -8.04% -5.69%
SM Energy 0.82% -1.52% -0.65%

Insider & Institutional Ownership

3.4% of U.S. Energy shares are held by institutional investors. Comparatively, 98.9% of SM Energy shares are held by institutional investors. 3.4% of U.S. Energy shares are held by company insiders. Comparatively, 1.0% of SM Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for U.S. Energy and SM Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Energy 0 0 0 0 N/A
SM Energy 0 7 13 0 2.65

SM Energy has a consensus price target of $26.80, suggesting a potential upside of 124.64%. Given SM Energy’s higher probable upside, analysts clearly believe SM Energy is more favorable than U.S. Energy.

Dividends

SM Energy pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. U.S. Energy does not pay a dividend. SM Energy pays out 333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares U.S. 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
U.S. Energy $6.55 million 0.83 -$1.36 million N/A N/A
SM Energy $2.07 billion 0.65 $508.41 million $0.03 397.67

SM Energy has higher revenue and earnings than U.S. Energy.

Summary

SM Energy beats U.S. Energy on 9 of the 12 factors compared between the two stocks.

U.S. Energy Company Profile

U.S. Energy Corp., an independent energy company, focuses on the acquisition and development of oil and gas producing properties in the continental United States. It holds interests in various oil and gas projects in Williston Basin of North Dakota; Dimmit County of Texas; and Coastal Louisiana. As of December 31, 2017, the company had estimated proved reserves of 824,115 barrels of oil equivalent. It has interests in oil and gas leases covering 4,744 net acres; and 13.89 net producing wells. The company was founded in 1966 and is based in Denver, Colorado.

SM Energy Company Profile

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of crude oil and condensate, natural gas, and natural gas liquids in onshore North America. As of December 31, 2018, the company had 503.4 million barrels of oil equivalent of estimated proved reserves; and working interests in 715 gross productive oil wells and 504 gross productive gas wells primarily in the Permian, South Texas, and Gulf Coast regions in the United States. 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.

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