Coterra Energy (NYSE:CTRA) & SM Energy (NYSE:SM) Critical Survey

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

Earnings & Valuation

This table compares Coterra Energy and SM Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coterra Energy	$5.46 billion	3.35	$1.12 billion	$2.09	11.46
SM Energy	$2.69 billion	1.15	$770.29 million	$7.08	3.79

Coterra Energy has higher revenue and earnings than SM Energy. SM Energy 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 and Risk

Coterra Energy has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, SM Energy has a beta of 2.46, indicating that its stock price is 146% more volatile than the S&P 500.

Institutional & Insider Ownership

87.9% of Coterra Energy shares are held by institutional investors. Comparatively, 94.6% of SM Energy shares are held by institutional investors. 1.7% of Coterra Energy shares are held by insiders. Comparatively, 1.5% of SM Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Coterra Energy pays an annual dividend of $0.88 per share and has a dividend yield of 3.7%. SM Energy pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. Coterra Energy pays out 42.1% of its earnings in the form of a dividend. SM Energy pays out 11.3% 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 raised its dividend for 4 consecutive years and SM Energy has raised its dividend for 4 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Coterra Energy	23.80%	10.99%	6.73%
SM Energy	25.94%	18.06%	9.08%

Analyst Recommendations

This is a summary of current ratings and target prices for Coterra Energy and SM Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coterra Energy	0	4	14	0	2.78
SM Energy	1	6	3	1	2.36

Coterra Energy currently has a consensus target price of $33.61, suggesting a potential upside of 40.37%. SM Energy has a consensus target price of $42.50, suggesting a potential upside of 58.20%. Given SM Energy’s higher probable upside, analysts clearly believe SM Energy is more favorable than Coterra Energy.

Summary

SM Energy beats Coterra Energy on 9 of the 17 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 SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.