Antero Resources (AR) and Midstates Petroleum (MPO) Critical Review

Antero Resources (NYSE: AR) and Midstates Petroleum (NYSE:MPO) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Risk & Volatility

Antero Resources has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Midstates Petroleum has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Insider & Institutional Ownership

95.4% of Antero Resources shares are held by institutional investors. Comparatively, 99.1% of Midstates Petroleum shares are held by institutional investors. 9.4% of Antero Resources shares are held by company insiders. Comparatively, 1.8% of Midstates Petroleum 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 Antero Resources and Midstates Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Antero Resources 10.36% 1.61% 0.91%
Midstates Petroleum -46.86% 4.70% 3.49%

Earnings and Valuation

This table compares Antero Resources and Midstates Petroleum’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Antero Resources $3.66 billion 1.71 $615.07 million $0.12 164.25
Midstates Petroleum $228.75 million 1.36 -$85.07 million $1.60 7.73

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

Analyst Ratings

This is a summary of current recommendations and price targets for Antero Resources and Midstates Petroleum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Antero Resources 0 11 7 0 2.39
Midstates Petroleum 0 1 0 0 2.00

Antero Resources presently has a consensus price target of $24.37, suggesting a potential upside of 23.63%. Given Antero Resources’ stronger consensus rating and higher probable upside, research analysts clearly believe Antero Resources is more favorable than Midstates Petroleum.

Summary

Antero Resources beats Midstates Petroleum on 9 of the 14 factors compared between the two stocks.

About Antero Resources

Antero Resources Corporation, an independent oil and natural gas company, acquires, explores, produces, and develops natural gas, natural gas liquids, and oil properties in the United States. As of December 31, 2017 had approximately 484,000 net acres in the southwestern core of the Marcellus Shale; approximately 137,000 net acres in the core of the Utica Shale; and approximately 214,000 net acres of Marcellus Shale leasehold. It also owned and operated 242 miles of gas gathering pipelines in the Marcellus Shale; and 123 miles of low-pressure, high-pressure, and condensate gathering pipelines in the Utica Shale; and 8 miles of high-pressure pipelines, as well as one compressor station. The company was formerly known as Antero Resources Appalachian Corporation and changed its name to Antero Resources Corporation in June 2013. Antero Resources Corporation was founded in 2002 and is headquartered in Denver, Colorado. Antero Resources Corporation is a subsidiary of Antero Resources Investment LLC.

About Midstates Petroleum

Midstates Petroleum Company, Inc. engages in the exploration, development, and production of oil, natural gas liquids, and natural gas in the United States. The company's operations are primarily focused on exploration and production activities in the Mississippian Lime and Anadarko Basin. As of December 31, 2017, its Mississippian Lime assets consisted of approximately 117,451 net acres in the Mississippian Lime trend in Woods and Alfalfa counties of Oklahoma; and Anadarko Basin assets consisted of approximately 76,409 net acres in Texas and 16,198 net acres in Western Oklahoma. The company was founded in 1993 and is headquartered in Tulsa, Oklahoma.

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