Critical Review: PrimeEnergy (NASDAQ:PNRG) versus Coterra Energy (NYSE:CTRA)

PrimeEnergy (NASDAQ:PNRG) and Coterra Energy (NYSE:CTRA) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PrimeEnergy	16.54%	17.98%	10.86%
Coterra Energy	23.80%	10.99%	6.73%

Institutional and Insider Ownership

87.9% of Coterra Energy shares are owned by institutional investors. 62.8% of PrimeEnergy shares are owned by company insiders. Comparatively, 1.7% of Coterra Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for PrimeEnergy and Coterra Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PrimeEnergy	0	0	0	0	0.00
Coterra Energy	0	4	14	0	2.78

Coterra Energy has a consensus price target of $33.61, suggesting a potential upside of 37.52%. Given Coterra Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Coterra Energy is more favorable than PrimeEnergy.

Valuation and Earnings

This table compares PrimeEnergy and Coterra Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PrimeEnergy	$237.80 million	1.05	$55.40 million	$14.87	10.17
Coterra Energy	$6.62 billion	2.82	$1.12 billion	$2.09	11.69

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

Volatility & Risk

PrimeEnergy has a beta of 0.2, meaning that its stock price is 80% less volatile than the S&P 500. Comparatively, Coterra Energy has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Summary

Coterra Energy beats PrimeEnergy on 10 of the 14 factors compared between the two stocks.

About PrimeEnergy

PrimeEnergy Resources Corporation, through its subsidiaries, engages in acquisition, development, and production of oil and natural gas properties in the United States. The company owns leasehold, mineral, and royalty interests in producing and non-producing oil and gas properties; and operates approximately 534 active wells and owns non-operating interests and royalties in 952 additional wells. It also acquires producing oil and gas properties through joint ventures with industry partners; and provides contract services to third parties, including well-servicing support, site-preparation, and construction services for oil and gas drilling and reworking operations. The company was formerly known as PrimeEnergy Corporation and changed its name to PrimeEnergy Resources Corporation in December 2018. PrimeEnergy Resources Corporation was incorporated in 1973 and is headquartered in Houston, Texas.

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.