Critical Analysis: Epsilon Energy (NASDAQ:EPSN) and Sable Offshore (NYSE:SOC)

Epsilon Energy (NASDAQ:EPSN) and Sable Offshore (NYSE:SOC) 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 risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

60.3% of Epsilon Energy shares are held by institutional investors. Comparatively, 26.2% of Sable Offshore shares are held by institutional investors. 5.5% of Epsilon Energy shares are held by insiders. Comparatively, 14.3% of Sable Offshore shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Epsilon Energy and Sable Offshore, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	0	0	0	N/A
Sable Offshore	0	0	1	0	3.00

Sable Offshore has a consensus target price of $20.00, indicating a potential upside of 88.86%. Given Sable Offshore’s higher probable upside, analysts clearly believe Sable Offshore is more favorable than Epsilon Energy.

Profitability

This table compares Epsilon Energy and Sable Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	22.60%	6.81%	5.67%
Sable Offshore	N/A	N/A	-42.39%

Volatility and Risk

Epsilon Energy has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, Sable Offshore has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500.

Earnings and Valuation

This table compares Epsilon Energy and Sable Offshore’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$30.73 million	3.87	$6.95 million	$0.31	17.52
Sable Offshore	N/A	N/A	-$32.18 million	N/A	N/A

Epsilon Energy has higher revenue and earnings than Sable Offshore.

Summary

Epsilon Energy beats Sable Offshore on 7 of the 10 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Houston, Texas.

About Sable Offshore

Sable Offshore Corp. engages in the oil and gas exploration and development activities in the United States. It operates through three platforms located offshore California and an onshore processing facility comprised of 16 federal leases across approximately 76,000 acres. The company was formerly known as Flame Acquisition Corp. and changed its name to Sable Offshore Corp. in February 2024. Sable Offshore Corp. was incorporated in 2020 and is based in Houston, Texas.