Analyzing Abraxas Petroleum (NASDAQ:AXAS) & Ecopetrol (NASDAQ:EC)

Abraxas Petroleum (NASDAQ:AXAS) and Ecopetrol (NYSE:EC) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

36.8% of Abraxas Petroleum shares are held by institutional investors. Comparatively, 2.3% of Ecopetrol shares are held by institutional investors. 5.7% of Abraxas Petroleum shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Abraxas Petroleum and Ecopetrol, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abraxas Petroleum 1 5 0 0 1.83
Ecopetrol 0 1 4 0 2.80

Abraxas Petroleum presently has a consensus target price of $1.00, suggesting a potential upside of 398.26%. Ecopetrol has a consensus target price of $16.16, suggesting a potential upside of 53.61%. Given Abraxas Petroleum’s higher probable upside, equities analysts clearly believe Abraxas Petroleum is more favorable than Ecopetrol.

Valuation & Earnings

This table compares Abraxas Petroleum and Ecopetrol’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Abraxas Petroleum $149.17 million 0.23 $57.82 million N/A N/A
Ecopetrol $21.45 billion 1.01 $19.24 billion $2.01 5.23

Ecopetrol has higher revenue and earnings than Abraxas Petroleum.

Volatility and Risk

Abraxas Petroleum has a beta of 3.6, meaning that its stock price is 260% more volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Profitability

This table compares Abraxas Petroleum and Ecopetrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Abraxas Petroleum 43.17% 9.26% 3.45%
Ecopetrol 17.10% 11.24% 4.89%

Summary

Ecopetrol beats Abraxas Petroleum on 8 of the 13 factors compared between the two stocks.

Abraxas Petroleum Company Profile

Abraxas Petroleum Corporation, an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of oil and gas properties in the United States. The company operates oil and gas assets in the Permian/Delaware Basin, the Rocky Mountain, and South Texas regions. As of December 31, 2018, its estimated net proved reserves were 67.2 million barrels of oil equivalent. The company was founded in 1977 and is based in San Antonio, Texas.

Ecopetrol Company Profile

Ecopetrol S.A. operates as an integrated oil and gas company. The company operates through three segments: Exploration and Production; Transport and Logistics; and Refining, Petrochemical, and Biofuels. It produces crude oil and gas; and engages in the extraction, collection, treatment, storage, commercialization, and pumping. The company has 9,071 kilometers of transportation pipeline systems. It also transports and distributes hydrocarbons, derivatives, and products. In addition, the company produces and markets polypropylene resin, compounds, and masterbatches; and offers refined and petrochemical products, as well as industrial service sales to customers. Ecopetrol S.A. has strategic partnership with Occidental Petroleum Corporation. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was founded in 1948 and is based in Bogotá, Colombia.

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