Canadian Natural Resources (NYSE:CNQ) versus Riley Exploration Permian (NYSE:REPX) Financial Analysis

Riley Exploration Permian (NYSE:REPX) and Canadian Natural Resources (NYSE:CNQ) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Volatility & Risk

Riley Exploration Permian has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Canadian Natural Resources has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Riley Exploration Permian and Canadian Natural Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Riley Exploration Permian	0	0	1	0	3.00
Canadian Natural Resources	0	4	0	0	2.00

Riley Exploration Permian presently has a consensus target price of $45.00, suggesting a potential upside of 35.30%. Canadian Natural Resources has a consensus target price of $51.00, suggesting a potential upside of 61.55%. Given Canadian Natural Resources’ higher possible upside, analysts plainly believe Canadian Natural Resources is more favorable than Riley Exploration Permian.

Dividends

Riley Exploration Permian pays an annual dividend of $1.52 per share and has a dividend yield of 4.6%. Canadian Natural Resources pays an annual dividend of $1.66 per share and has a dividend yield of 5.3%. Riley Exploration Permian pays out 27.0% of its earnings in the form of a dividend. Canadian Natural Resources pays out 64.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Riley Exploration Permian and Canadian Natural Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Riley Exploration Permian	$407.32 million	1.75	$111.59 million	$5.64	5.90
Canadian Natural Resources	$41.12 billion	1.62	$6.10 billion	$2.57	12.28

Canadian Natural Resources has higher revenue and earnings than Riley Exploration Permian. Riley Exploration Permian is trading at a lower price-to-earnings ratio than Canadian Natural Resources, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Riley Exploration Permian and Canadian Natural Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Riley Exploration Permian	28.48%	23.82%	11.31%
Canadian Natural Resources	18.45%	20.07%	10.51%

Insider & Institutional Ownership

58.9% of Riley Exploration Permian shares are owned by institutional investors. Comparatively, 74.0% of Canadian Natural Resources shares are owned by institutional investors. 3.9% of Riley Exploration Permian shares are owned by insiders. Comparatively, 5.0% of Canadian Natural Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

About Riley Exploration Permian

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the Northwest Shelf and Yeso trend of the Permian Basin. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Eddy County, New Mexico. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.