Talos Energy (NYSE:TALO) and Jones Energy (NYSE:JONE) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Profitability

This table compares Talos Energy and Jones Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Talos Energy -8.65% -7.69% -2.77%
Jones Energy -38.28% -16.15% -5.18%

Institutional and Insider Ownership

99.5% of Talos Energy shares are held by institutional investors. 3.5% of Talos Energy shares are held by insiders. Comparatively, 32.1% of Jones Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Talos Energy and Jones Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Talos Energy 0 0 2 0 3.00
Jones Energy 2 3 1 0 1.83

Talos Energy presently has a consensus price target of $45.00, indicating a potential upside of 44.28%. Jones Energy has a consensus price target of $16.00, indicating a potential upside of 203.03%. Given Jones Energy’s higher probable upside, analysts clearly believe Jones Energy is more favorable than Talos Energy.

Valuation and Earnings

This table compares Talos Energy and Jones Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Talos Energy $319.20 million 5.29 $382.67 million N/A N/A
Jones Energy $188.57 million 0.14 -$101.49 million ($8.40) -0.63

Talos Energy has higher revenue and earnings than Jones Energy.

Volatility and Risk

Talos Energy has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Jones Energy has a beta of 2.69, suggesting that its share price is 169% more volatile than the S&P 500.

Summary

Talos Energy beats Jones Energy on 10 of the 13 factors compared between the two stocks.

Talos Energy Company Profile

Talos Energy Inc., an independent oil and gas company, focuses on the offshore exploration and production in the United States Gulf of Mexico and the shallow waters off the coast of Mexico. The company is headquartered in Houston, Texas.

Jones Energy Company Profile

Jones Energy, Inc., an independent oil and gas company, engages in the acquisition, exploration, development, and production of oil and natural gas properties in the mid-continent United States. It owns leasehold interests in oil and natural gas producing properties, as well as in undeveloped acreage located in the Anadarko Basin in Oklahoma and Texas. As of December 31, 2017, the company's total estimated proved reserves included 104.8 million barrels of oil equivalent. Jones Energy, Inc. was founded in 1988 and is headquartered in Austin, Texas.

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