Contrasting Legacy Reserves (OTCMKTS:LGCYQ) and Epsilon Energy (NASDAQ:EPSN)

Epsilon Energy (NASDAQ:EPSN) and Legacy Reserves (OTCMKTS:LGCYQ) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

60.3% of Epsilon Energy shares are owned by institutional investors. 5.5% of Epsilon Energy shares are owned by insiders. Comparatively, 0.8% of Legacy Reserves shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Epsilon Energy and Legacy Reserves, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	0	1	1	3.50
Legacy Reserves	0	0	0	0	0.00

Epsilon Energy currently has a consensus target price of $7.00, suggesting a potential upside of 2.34%. Given Epsilon Energy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Epsilon Energy is more favorable than Legacy Reserves.

Valuation & Earnings

This table compares Epsilon Energy and Legacy Reserves”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$31.15 million	4.80	$6.95 million	$0.25	27.36
Legacy Reserves	N/A	N/A	N/A	N/A	N/A

Epsilon Energy has higher revenue and earnings than Legacy Reserves.

Profitability

This table compares Epsilon Energy and Legacy Reserves’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	16.97%	5.31%	4.30%
Legacy Reserves	N/A	N/A	N/A

Summary

Epsilon Energy beats Legacy Reserves on 10 of the 10 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.

About Legacy Reserves

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.