Unit (NYSE:UNT) and Tellurian (NASDAQ:TELL) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
This table compares Unit and Tellurian’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
86.8% of Unit shares are owned by institutional investors. Comparatively, 21.0% of Tellurian shares are owned by institutional investors. 5.2% of Unit shares are owned by insiders. Comparatively, 42.3% of Tellurian shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Unit and Tellurian’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Unit||$843.28 million||0.21||-$45.29 million||$1.00||3.26|
|Tellurian||$10.29 million||194.90||-$125.75 million||($0.57)||-14.53|
Unit has higher revenue and earnings than Tellurian. Tellurian is trading at a lower price-to-earnings ratio than Unit, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Unit has a beta of 2.54, suggesting that its stock price is 154% more volatile than the S&P 500. Comparatively, Tellurian has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Unit and Tellurian, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Unit presently has a consensus target price of $19.67, suggesting a potential upside of 503.27%. Tellurian has a consensus target price of $14.20, suggesting a potential upside of 71.50%. Given Unit’s higher probable upside, research analysts plainly believe Unit is more favorable than Tellurian.
Unit beats Tellurian on 10 of the 14 factors compared between the two stocks.
Unit Corporation, together with its subsidiaries, engages in the exploration, acquisition, development, and production of oil and natural gas properties in the United States. It operates through three segments: Oil and Natural Gas, Contract Drilling, and Mid-Stream. The Oil and Natural Gas segment explores for, acquires, develops, and produces oil and natural gas properties. Its producing oil and natural gas properties, unproved properties, and related assets are primarily located in Oklahoma and Texas, as well as in Arkansas, Colorado, Kansas, Louisiana, Montana, New Mexico, North Dakota, Utah, and Wyoming. The Contract Drilling segment is involved in the contract drilling of onshore oil and natural gas wells for a range of other oil and natural gas companies primarily in Oklahoma, Texas, Wyoming, North Dakota, Colorado, and Utah. It has 55 drilling rigs in its fleet. The Mid-Stream segment buys, sells, gathers, processes, and treats natural gas for third parties. This segment operates 3 natural gas treatment plants, 14 processing plants, 22 gathering systems, and approximately 1,475 miles of pipeline in Oklahoma, Texas, Kansas, Pennsylvania, and West Virginia. Unit Corporation was founded in 1963 and is headquartered in Tulsa, Oklahoma.
Tellurian Inc. plans to develop, own, and operate a natural gas business and to deliver natural gas to customers worldwide. The company is developing a portfolio of natural gas production, liquefied natural gas (LNG) marketing, and infrastructure assets that includes an approximately 27.6 million tons per annum LNG export facility and an associated pipeline in southwest Louisiana. As of December 31, 2018, it owned interests in approximately 10,233 net acres of natural gas properties, and 52 producing wells located in the Haynesville Shale trend of north Louisiana. Tellurian Inc. has a strategic partnership with TOTAL S.A. to develop the Driftwood LNG project located in Louisiana. The company was founded in 2016 and is headquartered in Houston, Texas.
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