Southwestern Energy (SWN) and PDC Energy (PDCE) Head to Head Review

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Southwestern Energy (NYSE:SWN) and PDC Energy (NASDAQ:PDCE) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Risk and Volatility

Southwestern Energy has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, PDC Energy has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Earnings & Valuation

This table compares Southwestern Energy and PDC Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southwestern Energy $3.20 billion 0.69 $1.05 billion $0.44 8.64
PDC Energy $921.62 million 2.21 -$127.50 million ($3.48) -8.86

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

Profitability

This table compares Southwestern Energy and PDC Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwestern Energy 14.22% 22.07% 6.49%
PDC Energy -10.52% 3.64% 1.96%

Analyst Recommendations

This is a summary of recent ratings for Southwestern Energy and PDC Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwestern Energy 4 12 1 0 1.82
PDC Energy 1 6 19 0 2.69

Southwestern Energy presently has a consensus price target of $5.45, indicating a potential upside of 43.51%. PDC Energy has a consensus price target of $64.58, indicating a potential upside of 109.54%. Given PDC Energy’s stronger consensus rating and higher probable upside, analysts clearly believe PDC Energy is more favorable than Southwestern Energy.

Insider & Institutional Ownership

96.7% of Southwestern Energy shares are owned by institutional investors. 0.7% of Southwestern Energy shares are owned by company insiders. Comparatively, 1.0% of PDC Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Southwestern Energy beats PDC Energy on 9 of the 14 factors compared between the two stocks.

About Southwestern Energy

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil in the United States. It operates through two segments, Exploration and Production, and Midstream. The company focuses on the Marcellus Shale, an unconventional natural gas reservoir covering approximately 191,226 net acres in Northeast Appalachia; Marcellus Shale, Utica, and Upper Devonian unconventional natural gas and oil reservoirs covering approximately 290,291 net acres in Southwest Appalachia; and the Fayetteville Shale, an unconventional natural gas reservoir covering approximately 917,842 net acres in Arkansas. It also holds interest in properties located in Colorado and Louisiana. In addition, the company engages in gathering, marketing, and transporting natural gas, oil, and natural gas liquids (NGLs). As of December 31, 2017, it had a pipeline of 2,045 miles and 16 miles in Louisiana in its gathering systems. The company's estimated proved natural gas, oil, and NGLs reserves comprise 14,775 billion cubic feet of natural gas equivalent (Bcfe); and 6,855 Bcfe of proved undeveloped reserves. Southwestern Energy Company was founded in 1929 and is headquartered in Spring, Texas.

About PDC Energy

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. The company's operations are primarily located in the Wattenberg Field in Colorado and the Delaware Basin in Texas. As of December 31, 2017, it had approximately 452.9 million barrels of crude oil equivalent of proved reserves; and owned an interest in approximately 2,900 gross productive wells. The company was formerly known as Petroleum Development Corporation and changed its name to PDC Energy, Inc. in June 2012. PDC Energy, Inc. was founded in 1969 and is headquartered in Denver, Colorado.

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