Advantage Oil & Gas (AAV) and Clayton Williams Energy (CWEI) Financial Analysis

Clayton Williams Energy (NYSE: CWEI) and Advantage Oil & Gas (NYSE:AAV) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional & Insider Ownership

67.8% of Clayton Williams Energy shares are owned by institutional investors. Comparatively, 54.8% of Advantage Oil & Gas shares are owned by institutional investors. 36.4% of Clayton Williams Energy shares are owned 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 ratings for Clayton Williams Energy and Advantage Oil & Gas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clayton Williams Energy 0 1 0 0 2.00
Advantage Oil & Gas 0 2 1 0 2.33

Advantage Oil & Gas has a consensus target price of $10.17, indicating a potential upside of 154.17%. Given Advantage Oil & Gas’ stronger consensus rating and higher probable upside, analysts plainly believe Advantage Oil & Gas is more favorable than Clayton Williams Energy.

Earnings & Valuation

This table compares Clayton Williams Energy and Advantage Oil & Gas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Clayton Williams Energy N/A N/A N/A ($21.71) -6.08
Advantage Oil & Gas $122.28 million 6.08 -$11.88 million $0.26 15.38

Clayton Williams Energy has higher earnings, but lower revenue than Advantage Oil & Gas. Clayton Williams Energy is trading at a lower price-to-earnings ratio than Advantage Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Clayton Williams Energy has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500. Comparatively, Advantage Oil & Gas has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Clayton Williams Energy and Advantage Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clayton Williams Energy -16.83% -63.50% -7.44%
Advantage Oil & Gas 27.06% 3.05% 2.48%

Summary

Advantage Oil & Gas beats Clayton Williams Energy on 8 of the 11 factors compared between the two stocks.

About Clayton Williams Energy

Clayton Williams Energy, Inc. is an independent oil and gas company engaged in the exploration for and production of oil and natural gas primarily in its core area in Southern Reeves County, Texas. The Company operates through two segments: oil and gas exploration and production, and contract drilling services. The Company focuses on developmental drilling in prolific oil shale provinces. The Company has holdings in the oil shale plays in the United States, the Wolfcamp Shale in the Southern Delaware Basin of West Texas. Its exploration program consists of generating exploratory prospects, leasing the acreage related to these prospects, drilling exploratory wells on these prospects to determine if recoverable oil and gas reserves exist, drilling developmental wells on these prospects and producing and selling any resulting oil and gas production. The Permian Basin is a sedimentary basin in West Texas and Southeastern New Mexico.

About Advantage Oil & Gas

Advantage Oil & Gas Ltd. is an intermediate natural gas and liquids development and production company. The Company is engaged in the business of natural gas exploitation, development, acquisition and production in the Province of Alberta. The Company focuses on the development of Montney resource play at Glacier, Alberta in Western Canada. The Company has drilled over 10 Montney gas wells. The Glacier property lies along the Alberta side of the border with British Columbia between Grande Prairie, Alberta and Dawson Creek, British Columbia. The primary zones of interest are within the Triassic Montney and Doig formation siltstones. The Glacier property consists of over 90 net sections of land with Doig/Montney interests. It owns and operates a gas plant located at 5-02-76-12W6. It also holds interest in approximately 20 additional sections of Doig/Montney land rights in the Glacier, Valhalla and Wembley area proximal to its existing land holdings.

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