Critical Contrast: GeoPark (GPRK) versus Lonestar Resources US (LONE)

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GeoPark (NASDAQ: LONE) and Lonestar Resources US (NASDAQ:LONE) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for GeoPark and Lonestar Resources US, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GeoPark 0 0 3 0 3.00
Lonestar Resources US 0 0 6 0 3.00

GeoPark presently has a consensus price target of $20.33, indicating a potential upside of 10.27%. Lonestar Resources US has a consensus price target of $11.50, indicating a potential upside of 38.55%. Given Lonestar Resources US’s higher probable upside, analysts plainly believe Lonestar Resources US is more favorable than GeoPark.

Insider & Institutional Ownership

29.6% of GeoPark shares are owned by institutional investors. Comparatively, 46.6% of Lonestar Resources US shares are owned by institutional investors. 2.3% of Lonestar Resources US shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares GeoPark and Lonestar Resources US’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GeoPark -1.43% -3.80% -0.67%
Lonestar Resources US -37.79% -5.39% -1.62%

Risk & Volatility

GeoPark has a beta of -0.16, meaning that its stock price is 116% less volatile than the S&P 500. Comparatively, Lonestar Resources US has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Earnings & Valuation

This table compares GeoPark and Lonestar Resources US’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GeoPark $330.12 million 3.35 -$24.22 million ($0.31) -59.48
Lonestar Resources US $94.07 million 2.17 -$38.66 million ($0.42) -19.76

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

Summary

GeoPark beats Lonestar Resources US on 7 of the 13 factors compared between the two stocks.

About GeoPark

GeoPark Limited engages in the exploration, development, and production of oil and gas reserves in Chile, Colombia, Brazil, Peru, and Argentina. As of December 31, 2017, the company had working and/or economic interests in 24 hydrocarbons blocks, as well as shallow-offshore concession in Brazil that includes the Manati Field. It had net proved reserves of 95.7 million barrels of oil equivalent. GeoPark Limited has a strategic partnership with ONGC Videsh to jointly acquire, invest in, and create value from upstream oil and gas projects across Latin America. The company was formerly known as GeoPark Holdings Limited and changed its name to GeoPark Limited in July 2013. GeoPark Limited was founded in 2002 and is based in Santiago, Chile.

About Lonestar Resources US

Lonestar Resources US Inc., an independent oil and gas company, engages in the acquisition, development, and production of unconventional oil, natural gas liquids, and natural gas properties in the United States. The company primarily focuses on Eagle Ford Shale properties in Texas counties. Lonestar Resources US Inc. was incorporated in 2015 and is headquartered in Fort Worth, Texas.

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