Analyzing SM Energy (NYSE:SM) and Antero Resources (NYSE:AR)

SM Energy (NYSE:SM) and Antero Resources (NYSE:AR) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Insider & Institutional Ownership

94.6% of SM Energy shares are held by institutional investors. Comparatively, 83.0% of Antero Resources shares are held by institutional investors. 1.5% of SM Energy shares are held by company insiders. Comparatively, 6.7% of Antero Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares SM Energy and Antero Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$2.44 billion	1.76	$817.88 million	$7.16	5.24
Antero Resources	$4.08 billion	2.54	$242.92 million	$0.14	237.50

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

Risk & Volatility

SM Energy has a beta of 4.15, meaning that its share price is 315% more volatile than the S&P 500. Comparatively, Antero Resources has a beta of 3.42, meaning that its share price is 242% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for SM Energy and Antero Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	0	6	7	1	2.64
Antero Resources	0	8	9	2	2.68

SM Energy currently has a consensus price target of $50.64, indicating a potential upside of 34.89%. Antero Resources has a consensus price target of $34.78, indicating a potential upside of 4.59%. Given SM Energy’s higher possible upside, equities research analysts clearly believe SM Energy is more favorable than Antero Resources.

Profitability

This table compares SM Energy and Antero Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SM Energy	33.89%	19.62%	10.87%
Antero Resources	1.03%	-0.59%	-0.32%

Summary

SM Energy beats Antero Resources on 8 of the 15 factors compared between the two stocks.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.

About Antero Resources

Antero Resources Corporation, an independent oil and natural gas company, engages in the development, production, exploration, and acquisition of natural gas, natural gas liquids (NGLs), and oil properties in the United States. It operates in three segments: Exploration and Development; Marketing; and Equity Method Investment in Antero Midstream. As of December 31, 2023, the company had approximately 515,000 net acres in the Appalachian Basin; and approximately 172,000 net acres in the Upper Devonian Shale. Its gathering and compression systems also comprise 631 miles of gas gathering pipelines in the Appalachian Basin. The company was formerly known as Antero Resources Appalachian Corporation and changed its name to Antero Resources Corporation in June 2013. Antero Resources Corporation was incorporated in 2002 and is headquartered in Denver, Colorado.