Petroquest Energy (NYSE: PQ) and Chesapeake Energy Corporation (NYSE:CHK) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitabiliy, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

This table compares Petroquest Energy and Chesapeake Energy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Petroquest Energy -46.00% N/A -17.77%
Chesapeake Energy Corporation -9.52% -16.10% 3.99%

Earnings & Valuation

This table compares Petroquest Energy and Chesapeake Energy Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Petroquest Energy $69.80 million 0.57 $22.97 million ($2.16) -0.88
Chesapeake Energy Corporation $8.59 billion 0.47 $502.00 million ($1.83) -2.48

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

Risk & Volatility

Petroquest Energy has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, Chesapeake Energy Corporation has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500.

Insider and Institutional Ownership

41.5% of Petroquest Energy shares are held by institutional investors. Comparatively, 64.8% of Chesapeake Energy Corporation shares are held by institutional investors. 9.4% of Petroquest Energy shares are held by insiders. Comparatively, 1.1% of Chesapeake Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Petroquest Energy and Chesapeake Energy Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Petroquest Energy 0 3 2 0 2.40
Chesapeake Energy Corporation 3 16 6 0 2.12

Petroquest Energy presently has a consensus price target of $4.00, suggesting a potential upside of 111.64%. Chesapeake Energy Corporation has a consensus price target of $6.83, suggesting a potential upside of 50.66%. Given Petroquest Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Petroquest Energy is more favorable than Chesapeake Energy Corporation.

Summary

Chesapeake Energy Corporation beats Petroquest Energy on 7 of the 13 factors compared between the two stocks.

About Petroquest Energy

PetroQuest Energy, Inc. is an oil and gas company. The Company is engaged in exploratory, development and acquisition activities. The Company has approximately 30 gross exploratory wells and over 30 gross development wells. The Company has reserves in various areas, including East Texas, Gulf Coast Basin and Oklahoma Woodford. Its annual production from East Texas area is approximately 114.1 billions of cubic feet equivalent (Bcfe); Gulf Coast Basin is over 43.9 Bcfe, and Oklahoma Woodford is approximately 20.0 Bcfe. The net production from its East Texas assets averages over 30.4 millions of cubic feet equivalent (MMcfe) per day. Production from Gulf Coast Basin area totals approximately 37.8 MMcfe per day. The average daily production from its Oklahoma-Woodford properties totals over 25 MMcfe per day. The Company sells its oil and natural gas production under fixed or floating market contracts.

About Chesapeake Energy Corporation

Chesapeake Energy Corporation produces natural gas, oil and natural gas liquids (NGL) in the United States. It operates in two segments: Exploration and Production, and Marketing, Gathering and Compression. Exploration and production is engaged in finding and producing oil, natural gas and NGL. Marketing, gathering and compression is engaged in marketing, gathering and compression of oil, natural gas and NGL. As of December 31, 2016, it owned interests in approximately 22,700 oil and natural gas wells. It has a diverse resource base of onshore the United States unconventional natural gas and liquids assets. It has positions in resource plays of the Eagle Ford Shale in South Texas, the Utica Shale in Ohio, the Anadarko Basin in northwestern Oklahoma and the stacked pay in the Powder River Basin in Wyoming. Its natural gas resource plays are the Haynesville/Bossier Shales in northwestern Louisiana and East Texas and the Marcellus Shale in the northern Appalachian Basin in Pennsylvania.

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