Financial Contrast: Granite Ridge Resources (NYSE:GRNT) vs. U.S. Energy (NASDAQ:USEG)

U.S. Energy (NASDAQ:USEG) and Granite Ridge Resources (NYSE:GRNT) are both small-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Risk & Volatility

U.S. Energy has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, Granite Ridge Resources has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Earnings & Valuation

This table compares U.S. Energy and Granite Ridge Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
U.S. Energy	$13.40 million	2.92	-$25.78 million	($0.81)	-1.35
Granite Ridge Resources	$380.03 million	1.87	$18.76 million	$0.24	22.60

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

Insider and Institutional Ownership

3.0% of U.S. Energy shares are held by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are held by institutional investors. 61.0% of U.S. Energy shares are held by insiders. Comparatively, 8.5% of Granite Ridge Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

U.S. Energy pays an annual dividend of $0.09 per share and has a dividend yield of 8.3%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 8.1%. U.S. Energy pays out -11.1% of its earnings in the form of a dividend. Granite Ridge Resources pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. U.S. Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings for U.S. Energy and Granite Ridge Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
U.S. Energy	1	0	1	0	2.00
Granite Ridge Resources	1	2	1	0	2.00

U.S. Energy presently has a consensus price target of $3.50, indicating a potential upside of 221.10%. Granite Ridge Resources has a consensus price target of $8.00, indicating a potential upside of 47.47%. Given U.S. Energy’s higher possible upside, equities research analysts clearly believe U.S. Energy is more favorable than Granite Ridge Resources.

Profitability

This table compares U.S. Energy and Granite Ridge Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
U.S. Energy	-174.90%	-60.68%	-33.31%
Granite Ridge Resources	7.47%	13.09%	7.89%

Summary

Granite Ridge Resources beats U.S. Energy on 8 of the 14 factors compared between the two stocks.

About U.S. Energy

U.S. Energy Corp., an independent energy company, focuses on the acquisition, exploration, and development of oil and natural gas properties in the United States. It holds interests in various oil and gas properties located in the Rockies region, including Montana, Wyoming, and North Dakota; the Mid-Continent region comprising Oklahoma, Kansas, and North and East Texas; West Texas; South Texas; and the Gulf Coast regions. The company was incorporated in 1966 and is headquartered in Houston, Texas.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.