Head-To-Head Review: Epsilon Energy (NASDAQ:EPSN) and Marathon Oil (NYSE:MRO)

Epsilon Energy (NASDAQ:EPSNGet Rating) and Marathon Oil (NYSE:MROGet Rating) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Institutional and Insider Ownership

58.7% of Epsilon Energy shares are owned by institutional investors. Comparatively, 75.2% of Marathon Oil shares are owned by institutional investors. 24.4% of Epsilon Energy shares are owned by insiders. Comparatively, 0.5% of Marathon Oil shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Epsilon Energy and Marathon Oil’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Epsilon Energy $42.40 million 3.69 $11.63 million $1.07 6.36
Marathon Oil $5.47 billion 3.33 $946.00 million $4.22 6.10

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

Profitability

This table compares Epsilon Energy and Marathon Oil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Epsilon Energy 42.69% 33.03% 25.64%
Marathon Oil 42.46% 23.30% 14.68%

Analyst Ratings

This is a summary of recent ratings and price targets for Epsilon Energy and Marathon Oil, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Epsilon Energy 0 0 0 0 N/A
Marathon Oil 2 4 9 1 2.56

Marathon Oil has a consensus target price of $30.19, suggesting a potential upside of 17.19%. Given Marathon Oil’s higher possible upside, analysts clearly believe Marathon Oil is more favorable than Epsilon Energy.

Dividends

Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 3.7%. Marathon Oil pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Epsilon Energy pays out 23.4% of its earnings in the form of a dividend. Marathon Oil pays out 7.6% 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. Marathon Oil has raised its dividend for 2 consecutive years.

Risk & Volatility

Epsilon Energy has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, Marathon Oil has a beta of 2.48, suggesting that its share price is 148% more volatile than the S&P 500.

Summary

Marathon Oil beats Epsilon Energy on 10 of the 17 factors compared between the two stocks.

About Epsilon Energy

(Get Rating)

Epsilon Energy Ltd., a natural gas and oil company, engages in the acquisition, development, gathering, and production of oil and gas reserves in the United States. It operates through Upstream and Gathering System segments. The Company has natural gas production in the Marcellus in Pennsylvania; and oil, natural gas liquids (NGL), and natural gas production in the Anadarko Basin in Oklahoma. As of December 31, 2021, it had total estimated net proved reserves of 110,969 million cubic feet of natural gas reserves, 819,726 barrels of NGL, and 305,052 barrels of oil and other liquids. Epsilon Energy Ltd. was incorporated in 2005 and is based in Houston, Texas.

About Marathon Oil

(Get Rating)

Marathon Oil Corporation operates as an independent exploration and production company in the United States and internationally. The company engages in the exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas; and the production and marketing of products manufactured from natural gas, such as liquefied natural gas and methanol. It also owns and operates 32 central gathering and treating facilities; and the Sugarloaf gathering system, a 42-mile natural gas pipeline through Karnes and Atascosa Counties. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in December 2001. Marathon Oil Corporation was founded in 1887 and is headquartered in Houston, Texas.

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