Torchlight Energy Resources (NASDAQ:TRCH) and Enerplus (NYSE:ERF) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

This table compares Torchlight Energy Resources and Enerplus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Torchlight Energy Resources -146.68% -11.94% -6.33%
Enerplus 32.58% 12.78% 7.64%

Dividends

Enerplus pays an annual dividend of $0.09 per share and has a dividend yield of 1.1%. Torchlight Energy Resources does not pay a dividend. Enerplus pays out 8.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

7.9% of Torchlight Energy Resources shares are held by institutional investors. Comparatively, 56.2% of Enerplus shares are held by institutional investors. 29.3% of Torchlight Energy Resources shares are held 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.

Volatility & Risk

Torchlight Energy Resources has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500. Comparatively, Enerplus has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

Valuation & Earnings

This table compares Torchlight Energy Resources and Enerplus’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Torchlight Energy Resources $570,000.00 202.96 -$910,000.00 N/A N/A
Enerplus $997.46 million 1.96 $291.88 million $1.09 7.50

Enerplus has higher revenue and earnings than Torchlight Energy Resources.

Analyst Ratings

This is a summary of recent recommendations for Torchlight Energy Resources and Enerplus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Torchlight Energy Resources 0 0 2 0 3.00
Enerplus 0 1 2 0 2.67

Torchlight Energy Resources currently has a consensus target price of $1.60, suggesting a potential downside of 3.03%. Enerplus has a consensus target price of $20.25, suggesting a potential upside of 147.56%. Given Enerplus’ higher probable upside, analysts clearly believe Enerplus is more favorable than Torchlight Energy Resources.

Summary

Enerplus beats Torchlight Energy Resources on 8 of the 13 factors compared between the two stocks.

Torchlight Energy Resources Company Profile

Torchlight Energy Resources, Inc., through its subsidiaries, engages in the acquisition, exploration, exploitation, and/or development of oil and natural gas properties in the United States. As of December 31, 2017 it had interests in four oil and gas projects, including the Orogrande project in Hudspeth County, Texas; Hazel project in Sterling, Tom Green, and Irion Counties, Texas; Winkler project in Winkler County, Texas; and Hunton wells in partnership with Husky Ventures in Central Oklahoma. The company was founded in 2010 and is based in Plano, Texas.

Enerplus Company Profile

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in the United States and Canada. Its crude oil properties are located in the Fort Berthold region of North Dakota and the Elm Coulee field in Richland County, Montana; and crude oil Waterfloods in Alberta and Saskatchewan, Canada. The company's natural gas area primarily consists of its non-operated Marcellus shale gas interests located in northeastern Pennsylvania. Enerplus Corporation was founded in 1986 and is headquartered in Calgary, Canada.

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