Contrasting Riley Exploration Permian (NYSE:REPX) and Coterra Energy (NYSE:CTRA)

Coterra Energy (NYSE:CTRA) and Riley Exploration Permian (NYSE:REPX) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Coterra Energy and Riley Exploration Permian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Coterra Energy	21.67%	10.61%	6.55%
Riley Exploration Permian	28.48%	23.82%	11.31%

Earnings & Valuation

This table compares Coterra Energy and Riley Exploration Permian”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coterra Energy	$5.46 billion	3.74	$1.12 billion	$1.72	15.55
Riley Exploration Permian	$412.89 million	1.48	$111.59 million	$4.68	5.93

Coterra Energy has higher revenue and earnings than Riley Exploration Permian. Riley Exploration Permian is trading at a lower price-to-earnings ratio than Coterra Energy, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

87.9% of Coterra Energy shares are held by institutional investors. Comparatively, 58.9% of Riley Exploration Permian shares are held by institutional investors. 1.7% of Coterra Energy shares are held by company insiders. Comparatively, 4.7% of Riley Exploration Permian shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Coterra Energy and Riley Exploration Permian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coterra Energy	0	4	17	1	2.86
Riley Exploration Permian	0	0	1	0	3.00

Coterra Energy presently has a consensus price target of $33.30, indicating a potential upside of 24.51%. Riley Exploration Permian has a consensus price target of $47.00, indicating a potential upside of 69.43%. Given Riley Exploration Permian’s stronger consensus rating and higher probable upside, analysts clearly believe Riley Exploration Permian is more favorable than Coterra Energy.

Volatility & Risk

Coterra Energy has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Riley Exploration Permian has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Dividends

Coterra Energy pays an annual dividend of $0.88 per share and has a dividend yield of 3.3%. Riley Exploration Permian pays an annual dividend of $1.52 per share and has a dividend yield of 5.5%. Coterra Energy pays out 51.2% of its earnings in the form of a dividend. Riley Exploration Permian pays out 32.5% 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. Coterra Energy has increased its dividend for 4 consecutive years and Riley Exploration Permian has increased its dividend for 3 consecutive years. Riley Exploration Permian is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Riley Exploration Permian beats Coterra Energy on 10 of the 18 factors compared between the two stocks.

About Coterra Energy

Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company’s properties include the Marcellus Shale with approximately 186,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania; Permian Basin properties with approximately 296,000 net acres located in west Texas and southeast New Mexico; and Anadarko Basin properties with approximately 182,000 net acres located in Oklahoma. It also operates natural gas and saltwater gathering and disposal systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities. Coterra Energy Inc. was incorporated in 1989 and is headquartered in Houston, Texas.

About Riley Exploration Permian

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the Northwest Shelf and Yeso trend of the Permian Basin. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Eddy County, New Mexico. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.