Critical Comparison: Matador Resources (NYSE:MTDR) versus PHX Minerals (NYSE:PHX)

PHX Minerals (NYSE:PHX) and Matador Resources (NYSE:MTDR) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for PHX Minerals and Matador Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PHX Minerals	0	0	3	0	3.00
Matador Resources	0	0	10	0	3.00

PHX Minerals presently has a consensus price target of $5.17, indicating a potential upside of 44.72%. Matador Resources has a consensus price target of $71.89, indicating a potential upside of 11.39%. Given PHX Minerals’ higher possible upside, equities analysts plainly believe PHX Minerals is more favorable than Matador Resources.

Earnings & Valuation

This table compares PHX Minerals and Matador Resources’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PHX Minerals	$53.50 million	2.47	$20.41 million	$0.62	5.76
Matador Resources	$2.75 billion	2.80	$1.21 billion	$7.66	8.43

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

Dividends

PHX Minerals pays an annual dividend of $0.09 per share and has a dividend yield of 2.5%. Matador Resources pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. PHX Minerals pays out 14.5% of its earnings in the form of a dividend. Matador Resources pays out 7.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PHX Minerals has increased its dividend for 2 consecutive years and Matador Resources has increased its dividend for 2 consecutive years.

Risk & Volatility

PHX Minerals has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Matador Resources has a beta of 3.54, meaning that its share price is 254% more volatile than the S&P 500.

Profitability

This table compares PHX Minerals and Matador Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PHX Minerals	37.12%	13.31%	10.05%
Matador Resources	33.46%	27.40%	15.51%

Institutional & Insider Ownership

35.2% of PHX Minerals shares are held by institutional investors. Comparatively, 87.2% of Matador Resources shares are held by institutional investors. 4.7% of PHX Minerals shares are held by company insiders. Comparatively, 6.0% of Matador Resources shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Matador Resources beats PHX Minerals on 12 of the 15 factors compared between the two stocks.

About PHX Minerals

PHX Minerals Inc. operates as a natural gas and oil mineral company in the United States. The company produces and sells natural gas, crude oil, and natural gas liquids. Its principal properties are located in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas. It sells its products to various purchasers, including pipeline and marketing companies. The company was formerly known as Panhandle Oil and Gas Inc. and changed its name to PHX Minerals Inc. in October 2020. PHX Minerals Inc. was founded in 1926 and is based in Fort Worth, Texas.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.