Critical Review: Pioneer Natural Resources (NYSE:PXD) vs. Legacy Reserves (OTCMKTS:LGCYQ)

Pioneer Natural Resources (NYSE:PXD) and Legacy Reserves (OTCMKTS:LGCYQ) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Pioneer Natural Resources and Legacy Reserves’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pioneer Natural Resources	26.52%	23.48%	14.56%
Legacy Reserves	N/A	N/A	N/A

Valuation and Earnings

This table compares Pioneer Natural Resources and Legacy Reserves’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pioneer Natural Resources	$24.29 billion	2.23	$7.85 billion	$20.94	11.10
Legacy Reserves	N/A	N/A	N/A	N/A	N/A

Pioneer Natural Resources has higher revenue and earnings than Legacy Reserves.

Institutional and Insider Ownership

82.7% of Pioneer Natural Resources shares are owned by institutional investors. 0.6% of Pioneer Natural Resources shares are owned by insiders. Comparatively, 0.8% of Legacy Reserves shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Pioneer Natural Resources and Legacy Reserves, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pioneer Natural Resources	1	12	11	0	2.42
Legacy Reserves	0	0	0	0	N/A

Pioneer Natural Resources presently has a consensus target price of $258.55, suggesting a potential upside of 11.27%. Given Pioneer Natural Resources’ higher probable upside, equities research analysts clearly believe Pioneer Natural Resources is more favorable than Legacy Reserves.

Summary

Pioneer Natural Resources beats Legacy Reserves on 7 of the 8 factors compared between the two stocks.

About Pioneer Natural Resources

Pioneer Natural Resources Company operates as an independent oil and gas exploration and production company in the United States. The company explores for, develops, and produces oil, natural gas liquids (NGLs), and gas. It has operations in the Midland Basin in West Texas. Pioneer Natural Resources Company was founded in 1997 and is headquartered in Irving, Texas.

About Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.