Comparing Matador Resources (NYSE:MTDR) and Royale Energy (OTCMKTS:ROYL)

Royale Energy (OTCMKTS:ROYL) and Matador Resources (NYSE:MTDR) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Royale Energy and Matador Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royale Energy	-145.31%	N/A	N/A
Matador Resources	27.45%	20.01%	10.67%

Analyst Recommendations

This is a summary of recent ratings and target prices for Royale Energy and Matador Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royale Energy	0	0	0	0	0.00
Matador Resources	0	1	13	0	2.93

Matador Resources has a consensus price target of $75.14, indicating a potential upside of 24.45%. Given Matador Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Matador Resources is more favorable than Royale Energy.

Volatility and Risk

Royale Energy has a beta of 0.1, indicating that its share price is 90% less volatile than the S&P 500. Comparatively, Matador Resources has a beta of 3.24, indicating that its share price is 224% more volatile than the S&P 500.

Earnings & Valuation

This table compares Royale Energy and Matador Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royale Energy	$2.16 million	1.52	-$1.83 million	($0.05)	-0.93
Matador Resources	$2.81 billion	2.68	$846.07 million	$7.55	8.00

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

Insider & Institutional Ownership

92.0% of Matador Resources shares are held by institutional investors. 61.8% of Royale Energy shares are held by insiders. Comparatively, 6.1% of Matador Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Matador Resources beats Royale Energy on 13 of the 14 factors compared between the two stocks.

About Royale Energy

Royale Energy, Inc. acquires, explores for, develops, produces, and sells oil and natural gas properties in the United States. Its principal operations are located in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana, and Colorado. Royale Energy, Inc. was incorporated in 1986 and is based in El Cajon, California.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.