Critical Contrast: Permian Resources (NYSE:PR) & Northern Oil and Gas (NYSE:NOG)

Permian Resources (NYSE:PR) and Northern Oil and Gas (NYSE:NOG) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

Permian Resources has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Permian Resources and Northern Oil and Gas, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	1	1	13	2	2.94
Northern Oil and Gas	1	5	4	1	2.45

Permian Resources currently has a consensus target price of $19.07, indicating a potential upside of 35.66%. Northern Oil and Gas has a consensus target price of $33.25, indicating a potential upside of 52.28%. Given Northern Oil and Gas’ higher probable upside, analysts plainly believe Northern Oil and Gas is more favorable than Permian Resources.

Institutional and Insider Ownership

91.8% of Permian Resources shares are held by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are held by institutional investors. 12.8% of Permian Resources shares are held by company insiders. Comparatively, 2.9% of Northern Oil and Gas shares are held 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.

Profitability

This table compares Permian Resources and Northern Oil and Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Permian Resources	15.65%	11.03%	6.98%
Northern Oil and Gas	7.61%	20.61%	8.60%

Valuation & Earnings

This table compares Permian Resources and Northern Oil and Gas”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Resources	$5.00 billion	2.33	$984.70 million	$1.09	12.89
Northern Oil and Gas	$2.23 billion	0.96	$520.31 million	$1.77	12.34

Permian Resources has higher revenue and earnings than Northern Oil and Gas. Northern Oil and Gas is trading at a lower price-to-earnings ratio than Permian Resources, indicating that it is currently the more affordable of the two stocks.

Dividends

Permian Resources pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. Northern Oil and Gas pays an annual dividend of $1.80 per share and has a dividend yield of 8.2%. Permian Resources pays out 55.0% of its earnings in the form of a dividend. Northern Oil and Gas pays out 101.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Resources has raised its dividend for 1 consecutive years and Northern Oil and Gas has raised its dividend for 4 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Permian Resources beats Northern Oil and Gas on 10 of the 18 factors compared between the two stocks.

About Permian Resources

Permian Resources Corporation, an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company’s assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, Texas.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.