Chesapeake Energy (NYSE: CHK) and ConocoPhillips (NYSE:COP) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Earnings & Valuation

This table compares Chesapeake Energy and ConocoPhillips’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chesapeake Energy $7.87 billion 0.32 -$4.40 billion ($0.58) -4.83
ConocoPhillips $32.58 billion 2.01 -$855.00 million ($0.65) -85.40

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

Institutional and Insider Ownership

63.5% of Chesapeake Energy shares are held by institutional investors. Comparatively, 70.9% of ConocoPhillips shares are held by institutional investors. 1.1% of Chesapeake Energy shares are held by insiders. Comparatively, 0.8% of ConocoPhillips shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Chesapeake Energy has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500. Comparatively, ConocoPhillips has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Profitability

This table compares Chesapeake Energy and ConocoPhillips’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chesapeake Energy 2.77% -19.93% 4.34%
ConocoPhillips -2.04% 2.78% 1.12%

Analyst Ratings

This is a breakdown of current ratings and price targets for Chesapeake Energy and ConocoPhillips, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Energy 6 10 4 0 1.90
ConocoPhillips 0 6 13 0 2.68

Chesapeake Energy presently has a consensus price target of $5.24, suggesting a potential upside of 87.03%. ConocoPhillips has a consensus price target of $58.87, suggesting a potential upside of 6.05%. Given Chesapeake Energy’s higher possible upside, analysts clearly believe Chesapeake Energy is more favorable than ConocoPhillips.

Dividends

ConocoPhillips pays an annual dividend of $1.14 per share and has a dividend yield of 2.1%. Chesapeake Energy does not pay a dividend. ConocoPhillips pays out -175.4% of its earnings in the form of a dividend.

Summary

ConocoPhillips beats Chesapeake Energy on 9 of the 16 factors compared between the two stocks.

About Chesapeake Energy

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.

About ConocoPhillips

ConocoPhillips is an independent exploration and production company. The Company explores for, produces, transports and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG) and natural gas liquids. The Company operates through five segments: Alaska, Lower 48, Canada, Europe and North Africa, Asia Pacific and Middle East, and Other International. The Alaska segment explores for, produces, transports and markets crude oil, natural gas liquids, natural gas and LNG. The Lower 48 segment consists of operations located in the United States Lower 48 states and the Gulf of Mexico. Its Canadian operations consists of oil sands developments in the Athabasca Region of northeastern Alberta. The Europe and North Africa segment consists of operations and exploration activities in Norway, the United Kingdom and Libya. The Asia Pacific and Middle East segment has exploration and production operations in China, Indonesia, Malaysia and Australia.

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