Head to Head Analysis: Magnolia Oil & Gas (NYSE:MGY) and Cheniere Energy (NYSE:LNG)

Magnolia Oil & Gas (NYSE:MGY) and Cheniere Energy (NYSE:LNG) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Magnolia Oil & Gas and Cheniere Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnolia Oil & Gas	$1.32 billion	3.46	$366.03 million	$2.01	11.76
Cheniere Energy	$16.89 billion	3.17	$3.25 billion	$13.67	17.68

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

Insider and Institutional Ownership

94.7% of Magnolia Oil & Gas shares are owned by institutional investors. Comparatively, 87.3% of Cheniere Energy shares are owned by institutional investors. 0.9% of Magnolia Oil & Gas shares are owned by insiders. Comparatively, 0.3% of Cheniere Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Magnolia Oil & Gas and Cheniere Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnolia Oil & Gas	2	8	4	0	2.14
Cheniere Energy	0	1	15	1	3.00

Magnolia Oil & Gas presently has a consensus target price of $27.00, suggesting a potential upside of 14.21%. Cheniere Energy has a consensus target price of $258.36, suggesting a potential upside of 6.89%. Given Magnolia Oil & Gas’ higher probable upside, research analysts plainly believe Magnolia Oil & Gas is more favorable than Cheniere Energy.

Dividends

Magnolia Oil & Gas pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. Cheniere Energy pays an annual dividend of $2.00 per share and has a dividend yield of 0.8%. Magnolia Oil & Gas pays out 29.9% of its earnings in the form of a dividend. Cheniere Energy pays out 14.6% 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. Magnolia Oil & Gas has raised its dividend for 3 consecutive years. Magnolia Oil & Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Magnolia Oil & Gas and Cheniere Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnolia Oil & Gas	28.50%	20.73%	14.32%
Cheniere Energy	18.37%	32.62%	7.18%

Risk and Volatility

Magnolia Oil & Gas has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.

About Cheniere Energy

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.