Analyzing Granite Ridge Resources (NYSE:GRNT) and VAALCO Energy (NYSE:EGY)

VAALCO Energy (NYSE:EGY) and Granite Ridge Resources (NYSE:GRNT) are both small-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.

Risk & Volatility

VAALCO Energy has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Granite Ridge Resources has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.

Valuation and Earnings

This table compares VAALCO Energy and Granite Ridge Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VAALCO Energy	$455.07 million	1.05	$60.35 million	$0.85	5.35
Granite Ridge Resources	$394.07 million	2.24	$81.10 million	$0.36	18.74

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

Analyst Ratings

This is a breakdown of current ratings and target prices for VAALCO Energy and Granite Ridge Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VAALCO Energy	0	0	1	0	3.00
Granite Ridge Resources	0	2	1	1	2.75

VAALCO Energy currently has a consensus price target of $8.00, indicating a potential upside of 76.02%. Granite Ridge Resources has a consensus price target of $7.60, indicating a potential upside of 12.68%. Given VAALCO Energy’s stronger consensus rating and higher possible upside, equities research analysts plainly believe VAALCO Energy is more favorable than Granite Ridge Resources.

Profitability

This table compares VAALCO Energy and Granite Ridge Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VAALCO Energy	17.93%	15.63%	8.72%
Granite Ridge Resources	12.59%	11.58%	7.89%

Insider & Institutional Ownership

50.3% of VAALCO Energy shares are held by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are held by institutional investors. 1.3% of VAALCO Energy shares are held by insiders. Comparatively, 1.9% of Granite Ridge Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

VAALCO Energy pays an annual dividend of $0.25 per share and has a dividend yield of 5.5%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 6.5%. VAALCO Energy pays out 29.4% of its earnings in the form of a dividend. Granite Ridge Resources pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

VAALCO Energy beats Granite Ridge Resources on 10 of the 16 factors compared between the two stocks.

About VAALCO Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.