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

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

Analyst Ratings

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

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

Antero Resources currently has a consensus price target of $34.78, suggesting a potential upside of 6.00%. SM Energy has a consensus price target of $50.64, suggesting a potential upside of 34.39%. Given SM Energy’s higher possible upside, analysts plainly believe SM Energy is more favorable than Antero Resources.

Profitability

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

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

Insider and Institutional Ownership

83.0% of Antero Resources shares are owned by institutional investors. Comparatively, 94.6% of SM Energy shares are owned by institutional investors. 6.7% of Antero Resources shares are owned by insiders. Comparatively, 1.5% of SM Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Antero Resources	$4.08 billion	2.50	$242.92 million	$0.14	234.36
SM Energy	$2.44 billion	1.77	$817.88 million	$7.16	5.26

SM Energy has lower revenue, but higher earnings 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.

Summary

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

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.

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.