Financial Analysis: PEDEVCO (NYSE:PED) and SM Energy (NYSE:SM)

SM Energy (NYSE:SM) and PEDEVCO (NYSE:PED) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for SM Energy and PEDEVCO, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	0	6	7	1	2.64
PEDEVCO	0	0	2	0	3.00

SM Energy currently has a consensus price target of $50.64, suggesting a potential upside of 24.78%. PEDEVCO has a consensus price target of $1.63, suggesting a potential upside of 96.73%. Given PEDEVCO’s stronger consensus rating and higher probable upside, analysts plainly believe PEDEVCO is more favorable than SM Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SM Energy	33.89%	19.62%	10.87%
PEDEVCO	6.57%	1.58%	1.39%

Risk and Volatility

SM Energy has a beta of 4.15, meaning that its share price is 315% more volatile than the S&P 500. Comparatively, PEDEVCO has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Earnings and Valuation

This table compares SM Energy and PEDEVCO”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$2.44 billion	1.90	$817.88 million	$7.16	5.67
PEDEVCO	$35.72 million	2.07	$260,000.00	$0.02	41.30

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

Institutional and Insider Ownership

94.6% of SM Energy shares are owned by institutional investors. Comparatively, 3.3% of PEDEVCO shares are owned by institutional investors. 1.5% of SM Energy shares are owned by company insiders. Comparatively, 70.6% of PEDEVCO shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

SM Energy beats PEDEVCO on 10 of the 15 factors compared between the two stocks.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. 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.

About PEDEVCO

PEDEVCO Corp., an oil and gas company, focuses on the acquisition, development, and production of oil and natural gas assets in the United States. It holds interests in the Permian Basin asset covering an area of approximately 22,721 net acres located in New Mexico; and D-J Basin asset covering an area of approximately 19,214 net acres located in Wyoming. The company is headquartered in Houston, Texas.