Critical Review: SM Energy (NYSE:SM) vs. HKN (OTCMKTS:HKNI)

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for HKN and SM Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HKN	0	0	0	0	0.00
SM Energy	1	7	3	1	2.33

SM Energy has a consensus price target of $36.64, suggesting a potential upside of 100.86%. Given SM Energy’s stronger consensus rating and higher possible upside, analysts plainly believe SM Energy is more favorable than HKN.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HKN	N/A	N/A	N/A
SM Energy	25.94%	18.06%	9.08%

Insider and Institutional Ownership

94.6% of SM Energy shares are owned by institutional investors. 0.1% of HKN shares are owned by company insiders. Comparatively, 1.5% of SM Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares HKN and SM Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HKN	N/A	N/A	N/A	N/A	N/A
SM Energy	$3.27 billion	0.64	$770.29 million	$6.34	2.88

SM Energy has higher revenue and earnings than HKN.

Summary

SM Energy beats HKN on 10 of the 10 factors compared between the two stocks.

About HKN

HKN, Inc. operates as an independent energy company. The company owns an oilfield emulsion breaking technology that purifies oilfield emulsions by breaking and separating the emulsions into oil, water, and solids. It also holds non-operated oil and gas leases and mineral interests in properties located in the Bakken and Niobrara shale oil plays; and rights to acreage in the Permian Basin of Texas. The company was founded in 1973 and is based in Southlake, 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.