Head-To-Head Analysis: Cheniere Energy (NYSE:LNG) & Diamondback Energy (NASDAQ:FANG)

Cheniere Energy (NYSE:LNG) and Diamondback Energy (NASDAQ:FANG) are both large-cap energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Valuation & Earnings

This table compares Cheniere Energy and Diamondback Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheniere Energy	$15.70 billion	3.32	$3.25 billion	$17.13	13.85
Diamondback Energy	$11.07 billion	3.73	$3.34 billion	$14.07	10.14

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

Dividends

Cheniere Energy pays an annual dividend of $2.00 per share and has a dividend yield of 0.8%. Diamondback Energy pays an annual dividend of $4.00 per share and has a dividend yield of 2.8%. Cheniere Energy pays out 11.7% of its earnings in the form of a dividend. Diamondback Energy pays out 28.4% 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. Diamondback Energy has increased its dividend for 7 consecutive years. Diamondback Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

87.3% of Cheniere Energy shares are held by institutional investors. Comparatively, 90.0% of Diamondback Energy shares are held by institutional investors. 0.3% of Cheniere Energy shares are held by company insiders. Comparatively, 0.7% of Diamondback Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Cheniere Energy has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Diamondback Energy has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares Cheniere Energy and Diamondback Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheniere Energy	21.05%	37.83%	8.79%
Diamondback Energy	27.25%	9.48%	5.63%

Analyst Ratings

This is a breakdown of current ratings and target prices for Cheniere Energy and Diamondback Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheniere Energy	0	1	15	1	3.00
Diamondback Energy	0	1	21	2	3.04

Cheniere Energy presently has a consensus price target of $263.29, indicating a potential upside of 10.95%. Diamondback Energy has a consensus price target of $193.17, indicating a potential upside of 35.33%. Given Diamondback Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Diamondback Energy is more favorable than Cheniere Energy.

Summary

Diamondback Energy beats Cheniere Energy on 12 of the 18 factors compared between the two stocks.

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.

About Diamondback Energy

Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.