Financial Survey: SM Energy (SM) vs. Callon Petroleum (CPE)

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SM Energy (NYSE: CPE) and Callon Petroleum (NYSE:CPE) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares SM Energy and Callon Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SM Energy 11.85% -0.43% -0.17%
Callon Petroleum 31.27% 7.25% 4.88%

Dividends

SM Energy pays an annual dividend of $0.10 per share and has a dividend yield of 0.3%. Callon Petroleum does not pay a dividend. SM Energy pays out -12.2% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SM Energy and Callon Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SM Energy 0 8 10 0 2.56
Callon Petroleum 0 3 15 0 2.83

SM Energy currently has a consensus target price of $30.60, indicating a potential upside of 2.27%. Callon Petroleum has a consensus target price of $16.35, indicating a potential upside of 47.72%. Given Callon Petroleum’s stronger consensus rating and higher probable upside, analysts plainly believe Callon Petroleum is more favorable than SM Energy.

Volatility and Risk

SM Energy has a beta of 3.07, suggesting that its stock price is 207% more volatile than the S&P 500. Comparatively, Callon Petroleum has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares SM Energy and Callon Petroleum’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SM Energy $1.13 billion 2.97 -$160.84 million ($0.82) -36.49
Callon Petroleum $366.47 million 6.87 $120.42 million $0.42 26.36

Callon Petroleum has lower revenue, but higher earnings than SM Energy. SM Energy is trading at a lower price-to-earnings ratio than Callon Petroleum, indicating that it is currently the more affordable of the two stocks.

Summary

Callon Petroleum beats SM Energy on 9 of the 13 factors compared between the two stocks.

SM Energy Company Profile

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of crude oil and condensate, natural gas, and natural gas liquids in onshore North America. It primarily has operations in the Midland Basin and the Eagle Ford shale in Texas. As of December 31, 2017, the company had 468.1 million barrels of oil equivalent of estimated proved reserves; and working interests in 919 net productive oil wells and 489 net productive gas wells. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.

Callon Petroleum Company Profile

Callon Petroleum Company, an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of unconventional onshore, oil, and natural gas reserves in the Permian Basin in West Texas. As of December 31, 2017, its estimated net proved reserves totaled 137.0 million barrel of oil equivalent. The company was founded in 1950 and is headquartered in Natchez, Mississippi.

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