Critical Contrast: PDC Energy (NASDAQ:PDCE) versus TransGlobe Energy (NASDAQ:TGA)

PDC Energy (NASDAQ:PDCE) and TransGlobe Energy (NASDAQ:TGA) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

TransGlobe Energy pays an annual dividend of $0.07 per share and has a dividend yield of 6.1%. PDC Energy does not pay a dividend. TransGlobe Energy pays out 15.6% of its earnings in the form of a dividend.

Profitability

This table compares PDC Energy and TransGlobe Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PDC Energy 8.49% -5.40% -2.86%
TransGlobe Energy 16.15% 8.24% 5.73%

Earnings and Valuation

This table compares PDC Energy and TransGlobe Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PDC Energy $1.55 billion 0.93 $2.02 million ($2.96) -7.92
TransGlobe Energy $299.14 million 0.28 $15.68 million $0.45 2.53

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

Institutional and Insider Ownership

40.4% of TransGlobe Energy shares are owned by institutional investors. 1.0% of PDC Energy shares are owned by company insiders. Comparatively, 4.0% of TransGlobe Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

PDC Energy has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, TransGlobe Energy has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for PDC Energy and TransGlobe Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PDC Energy 0 3 18 0 2.86
TransGlobe Energy 0 0 0 0 N/A

PDC Energy presently has a consensus target price of $50.12, indicating a potential upside of 113.90%. Given PDC Energy’s higher probable upside, equities research analysts plainly believe PDC Energy is more favorable than TransGlobe Energy.

Summary

TransGlobe Energy beats PDC Energy on 10 of the 15 factors compared between the two stocks.

About PDC Energy

PDC Energy, Inc., an independent exploration and production company, acquires, explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the United States. Its operations are primarily located in the Wattenberg Field in Colorado and the Delaware Basin in Texas. The company was formerly known as Petroleum Development Corporation and changed its name to PDC Energy, Inc. in June 2012. PDC Energy, Inc. was founded in 1969 and is headquartered in Denver, Colorado.

About TransGlobe Energy

TransGlobe Energy Corporation, together with its subsidiaries, engages in the exploration, development, and production of crude oil and natural gas in Egypt and Canada. The company holds an interest in five production sharing concessions, including West Gharib, West Bakr, South Alamein, NW Gharib, and South Ghazalat, Egypt; and owns production and working interests in facilities in the Cardium light oil and Mannville liquid-rich gas assets in the Harmattan area of west central Alberta, Canada. TransGlobe Energy Corporation was incorporated in 1968 and is headquartered in Calgary, Canada.

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