Reviewing Denbury Resources (DNR) & Lonestar Resources US (LONE)

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

Volatility & Risk

Get Denbury Resources alerts:

Denbury Resources has a beta of 3.56, suggesting that its share price is 256% more volatile than the S&P 500. Comparatively, Lonestar Resources US has a beta of 2.38, suggesting that its share price is 138% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Denbury Resources and Lonestar Resources US, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denbury Resources	1	6	1	0	2.00
Lonestar Resources US	0	0	6	0	3.00

Denbury Resources presently has a consensus price target of $4.94, indicating a potential upside of 156.11%. Lonestar Resources US has a consensus price target of $11.30, indicating a potential upside of 138.90%. Given Denbury Resources’ higher probable upside, equities research analysts plainly believe Denbury Resources is more favorable than Lonestar Resources US.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Denbury Resources	18.81%	27.79%	4.88%
Lonestar Resources US	-38.32%	-3.88%	-1.08%

Institutional and Insider Ownership

90.9% of Denbury Resources shares are held by institutional investors. Comparatively, 55.5% of Lonestar Resources US shares are held by institutional investors. 1.1% of Denbury Resources shares are held by insiders. Comparatively, 2.3% of Lonestar Resources US shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Denbury Resources and Lonestar Resources US’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denbury Resources	$1.13 billion	0.79	$163.15 million	$0.48	4.02
Lonestar Resources US	$94.07 million	1.24	-$43.48 million	($0.42)	-11.26

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

Summary

Denbury Resources beats Lonestar Resources US on 10 of the 14 factors compared between the two stocks.

Denbury Resources Company Profile

Denbury Resources Inc. operates as an independent oil and natural gas company in the United States. It holds interests in various oil and natural gas properties located in Mississippi, Texas, Louisiana, and Alabama in the Gulf Coast region; and in Montana, North Dakota, and Wyoming in the Rocky Mountain region. As of December 31, 2017, the company had 259.7 million barrels of oil equivalent of estimated proved oil and natural gas reserves. Denbury Resources Inc. was founded in 1951 and is headquartered in Plano, Texas.

Lonestar Resources US Company Profile

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.