WPX Energy (WPX) & Laredo Petroleum (LPI) Financial Analysis

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WPX Energy (NYSE:WPX) and Laredo Petroleum (NYSE:LPI) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Institutional and Insider Ownership

93.9% of WPX Energy shares are held by institutional investors. 1.5% of WPX Energy shares are held by insiders. Comparatively, 2.2% of Laredo Petroleum shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for WPX Energy and Laredo Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WPX Energy 0 1 25 1 3.00
Laredo Petroleum 2 9 4 0 2.13

WPX Energy currently has a consensus target price of $23.12, indicating a potential upside of 52.07%. Laredo Petroleum has a consensus target price of $12.38, indicating a potential upside of 150.70%. Given Laredo Petroleum’s higher possible upside, analysts clearly believe Laredo Petroleum is more favorable than WPX Energy.

Valuation & Earnings

This table compares WPX Energy and Laredo Petroleum’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WPX Energy $1.34 billion 4.78 -$16.00 million ($0.42) -36.19
Laredo Petroleum $822.16 million 1.41 $548.97 million $0.60 8.23

Laredo Petroleum has lower revenue, but higher earnings than WPX Energy. WPX Energy is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares WPX Energy and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WPX Energy -30.02% -0.97% -0.46%
Laredo Petroleum 51.05% 25.80% 9.27%

Risk & Volatility

WPX Energy has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Summary

Laredo Petroleum beats WPX Energy on 8 of the 15 factors compared between the two stocks.

WPX Energy Company Profile

WPX Energy, Inc., an independent oil and natural gas exploration and production company, engages in the exploitation and development of unconventional properties in the United States. The company's principal areas of operation include the Delaware Basin in Texas and New Mexico; the Williston Basin in North Dakota; and the San Juan Basin in New Mexico and Colorado. As of December 31, 2017, it had proved reserves of 436 million barrels of oil equivalent. The company was incorporated in 2011 and is headquartered in Tulsa, Oklahoma.

Laredo Petroleum Company Profile

Laredo Petroleum, Inc. operates as an independent energy company in the United States. It operates through two segments, Exploration and Production; and Midstream and Marketing. The company engages in the acquisition, exploration, and development of oil and natural gas properties; and the transportation of oil and natural gas primarily in the Permian Basin in West Texas, as well as rig fuel, natural gas lift, and water delivery and takeaway services. As of December 31, 2017, it had assembled 124,843 net acres in the Permian Basin; and had total proved reserves of 215,883 thousand barrels of oil equivalent. The company was formerly known as Laredo Petroleum Holdings, Inc. and changed its name to Laredo Petroleum, Inc. in December 2013. Laredo Petroleum, Inc. was founded in 2006 and is headquartered in Tulsa, Oklahoma.

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