Critical Analysis: CNX Resources (NYSE:CNX) and Magnolia Oil & Gas (NYSE:MGY)

Magnolia Oil & Gas (NYSE:MGY) and CNX Resources (NYSE:CNX) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Risk and Volatility

Magnolia Oil & Gas has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500. Comparatively, CNX Resources has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Magnolia Oil & Gas and CNX Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnolia Oil & Gas	2	8	4	0	2.14
CNX Resources	8	6	0	0	1.43

Magnolia Oil & Gas presently has a consensus price target of $27.58, indicating a potential upside of 17.63%. CNX Resources has a consensus price target of $29.67, indicating a potential downside of 2.02%. Given Magnolia Oil & Gas’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Magnolia Oil & Gas is more favorable than CNX Resources.

Earnings and Valuation

This table compares Magnolia Oil & Gas and CNX Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnolia Oil & Gas	$1.23 billion	3.76	$388.30 million	$2.02	11.61
CNX Resources	$1.27 billion	3.57	-$90.49 million	($0.68)	-44.53

Magnolia Oil & Gas has higher earnings, but lower revenue than CNX Resources. CNX Resources is trading at a lower price-to-earnings ratio than Magnolia Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.7% of Magnolia Oil & Gas shares are owned by institutional investors. Comparatively, 95.2% of CNX Resources shares are owned by institutional investors. 1.2% of Magnolia Oil & Gas shares are owned by insiders. Comparatively, 3.1% of CNX Resources shares are owned by 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.

Profitability

This table compares Magnolia Oil & Gas and CNX Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnolia Oil & Gas	28.88%	20.78%	14.19%
CNX Resources	-7.14%	6.72%	3.31%

Summary

Magnolia Oil & Gas beats CNX Resources on 11 of the 14 factors compared between the two stocks.

About Magnolia Oil & Gas

Magnolia Oil & Gas Corp. engages in the acquisition, development, exploration, and production of oil and natural gas properties. It operates assets located in the Eagle Ford Shale and Austin Chalk formations in South Texas. The company was founded on February 14, 2017 and is headquartered in Houston, TX.

About CNX Resources

CNX Resources Corporation, an independent natural gas and midstream company, engages in the acquisition, exploration, development, and production of natural gas properties in the Appalachian Basin. The company operates in two segments, Shale and Coalbed Methane (CBM). It produces and sells pipeline quality natural gas primarily for gas wholesalers. The company owns rights to extract natural gas from shale properties in Pennsylvania, West Virginia, and Ohio, as well as rights to extract natural gas from other shale and shallow oil and gas formations in Illinois, Indiana, New York, and Virginia. It also owns rights to extract CBM in Virginia, West Virginia, Pennsylvania, Ohio, Illinois, Indiana, and New Mexico. In addition, the company designs, builds, and operates natural gas gathering systems to move gas from the wellhead to interstate pipelines or other local sales points; owns and operates approximately 2,600 miles of natural gas gathering pipelines, as well as various natural gas processing facilities. It also offers turn-key solutions for water sourcing, delivery, and disposal for its natural gas operations and for third parties. The company was formerly known as CONSOL Energy Inc. and changed its name to CNX Resources Corporation in November 2017. CNX Resources Corporation was founded in 1860 and is headquartered in Canonsburg, Pennsylvania.