Analyzing Talos Energy (NYSE:TALO) and Mexco Energy (NYSE:MXC)

Mexco Energy (NYSE:MXC) and Talos Energy (NYSE:TALO) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mexco Energy	17.59%	6.94%	6.37%
Talos Energy	3.95%	-1.98%	-0.86%

Insider and Institutional Ownership

5.9% of Mexco Energy shares are held by institutional investors. Comparatively, 89.3% of Talos Energy shares are held by institutional investors. 53.1% of Mexco Energy shares are held by insiders. Comparatively, 0.8% of Talos 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.

Volatility and Risk

Mexco Energy has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Talos Energy has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Valuation & Earnings

This table compares Mexco Energy and Talos Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mexco Energy	$6.61 million	3.72	$1.35 million	$0.57	21.07
Talos Energy	$1.87 billion	1.06	$187.33 million	$0.54	20.40

Talos Energy has higher revenue and earnings than Mexco Energy. Talos Energy is trading at a lower price-to-earnings ratio than Mexco Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Mexco Energy and Talos Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mexco Energy	0	0	0	0	0.00
Talos Energy	0	2	7	0	2.78

Talos Energy has a consensus target price of $15.94, suggesting a potential upside of 44.75%. Given Talos Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Talos Energy is more favorable than Mexco Energy.

About Mexco Energy

Mexco Energy Corporation, an independent oil and gas company, engages in the acquisition, exploration, development, and production of natural gas, crude oil, condensate, and natural gas liquids in the United States. It owns partial interests in approximately 6,400 gross producing wells located in the states of Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Wyoming, Kansas, Colorado, Montana, Virginia, North Dakota, and Ohio. It also owned leasehold mineral, royalty, and other interests in approximately 2,768 net acres. The company was formerly known as Miller Oil Company and changed its name to Mexco Energy Corporation in April 1980. Mexco Energy Corporation was incorporated in 1972 and is based in Midland, Texas.

About Talos Energy

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.