Reviewing Earthstone Energy (NYSE:ESTE) & CNX Resources (NYSE:CNX)

CNX Resources (NYSE:CNX) and Earthstone Energy (NYSE:ESTE) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility and Risk

CNX Resources has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Earthstone Energy has a beta of 1.9, suggesting that its share price is 90% more volatile than the S&P 500.

Earnings and Valuation

This table compares CNX Resources and Earthstone Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNX Resources $1.73 billion 0.93 $796.53 million $1.53 5.63
Earthstone Energy $165.36 million 1.48 $42.33 million $1.44 2.65

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

Analyst Recommendations

This is a summary of current recommendations and price targets for CNX Resources and Earthstone Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNX Resources 1 2 2 0 2.20
Earthstone Energy 0 1 7 0 2.88

CNX Resources presently has a consensus price target of $14.75, indicating a potential upside of 71.11%. Earthstone Energy has a consensus price target of $9.71, indicating a potential upside of 154.97%. Given Earthstone Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Earthstone Energy is more favorable than CNX Resources.

Institutional & Insider Ownership

95.9% of CNX Resources shares are owned by institutional investors. Comparatively, 21.3% of Earthstone Energy shares are owned by institutional investors. 2.4% of CNX Resources shares are owned by insiders. Comparatively, 63.0% of Earthstone Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares CNX Resources and Earthstone Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNX Resources 17.60% 4.09% 2.38%
Earthstone Energy 16.18% 5.47% 4.42%

Summary

Earthstone Energy beats CNX Resources on 8 of the 14 factors compared between the two stocks.

About CNX Resources

CNX Resources Corporation, an independent oil and gas company, explores for, develops, and produces natural gas primarily in the Appalachian Basin. The company operates through two divisions, Exploration and Production (E&P), and Midstream. The E&P division produces pipeline quality natural gas primarily to gas wholesalers. This division owns rights to extract natural gas in Pennsylvania, West Virginia, and Ohio from approximately 539,000 net Marcellus Shale acres; and 627,000 net acres of Utica Shale, as well as rights to extract natural gas from other shale and shallow oil and gas positions from approximately 968,000 in Illinois, Indiana, New York, Ohio, Pennsylvania, Virginia, and West Virginia. It also owns rights to extract coalbed methane (CBM) in Virginia from approximately 308,000 net CBM acres, as well as 210,000 net CBM acres in West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico. The Midstream division owns, operates, and develops natural gas gathering and other midstream energy assets in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia. The company also offers gas gathering and water delivery solutions to third-parties. The company was formerly known as CONSOL Energy Inc. and changed its name to CNX Resources Corporation in November 2017. CNX Resources Corporation was founded in 1860 and is headquartered in Canonsburg, Pennsylvania.

About Earthstone Energy

Earthstone Energy, Inc., an independent energy company, engages in the development and operation of oil and gas properties in the United States. Its asset portfolio includes the Midland Basin of west Texas and the Eagle Ford trend of south Texas. As of December 31, 2018, the company operated 93 gross Eagle Ford wells; and 13 gross Austin Chalk wells, as well as had 98,847 thousand barrels of oil equivalent (MBOE) of total proved reserves comprised 23,646 MBOE of proved developed reserves and 75,201 MBOE of proved undeveloped reserves. Earthstone Energy, Inc. was founded in 1969 and is headquartered in The Woodlands, Texas.

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