Legacy Reserves (NASDAQ:LGCY) and Chesapeake Granite Wash Trust (NYSE:CHKR) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Risk and Volatility

Legacy Reserves has a beta of 2.15, indicating that its stock price is 115% more volatile than the S&P 500. Comparatively, Chesapeake Granite Wash Trust has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Profitability

This table compares Legacy Reserves and Chesapeake Granite Wash Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Legacy Reserves -18.46% -4.82% -5.33%
Chesapeake Granite Wash Trust 81.70% 42.63% 42.51%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Legacy Reserves and Chesapeake Granite Wash Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Legacy Reserves 0 1 0 0 2.00
Chesapeake Granite Wash Trust 0 0 0 0 N/A

Institutional & Insider Ownership

42.8% of Legacy Reserves shares are held by institutional investors. Comparatively, 0.7% of Chesapeake Granite Wash Trust shares are held by institutional investors. 0.8% of Legacy Reserves shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Legacy Reserves and Chesapeake Granite Wash Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Legacy Reserves $554.86 million 0.03 $43.83 million $0.18 0.72
Chesapeake Granite Wash Trust $13.50 million 3.79 $11.30 million N/A N/A

Legacy Reserves has higher revenue and earnings than Chesapeake Granite Wash Trust.

Dividends

Chesapeake Granite Wash Trust pays an annual dividend of $0.12 per share and has a dividend yield of 11.0%. Legacy Reserves does not pay a dividend. Legacy Reserves has raised its dividend for 8 consecutive years.

Summary

Legacy Reserves beats Chesapeake Granite Wash Trust on 6 of the 11 factors compared between the two stocks.

Legacy Reserves Company Profile

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas.

Chesapeake Granite Wash Trust Company Profile

Chesapeake Granite Wash Trust owns royalty interests in oil, natural gas liquids, and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. The company has royalty interests in 69 producing wells and 118 development wells, and in approximately 26,400 net acres of area. As of December 31, 2018, its reserve estimates for the royalty interests included 5,075 thousand barrels of oil equivalent of proved developed reserves. The company was founded in 2011 and is based in Houston, Texas.

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