Critical Survey: Anadarko Petroleum (NASDAQ:APC) versus Barnwell Industries (NYSE:BRN)

Barnwell Industries (NYSE:BRN) and Anadarko Petroleum (NASDAQ:APC) are both small-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Profitability

This table compares Barnwell Industries and Anadarko Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barnwell Industries	-34.01%	-48.90%	-22.57%
Anadarko Petroleum	-4.20%	10.49%	2.68%

Institutional and Insider Ownership

40.7% of Barnwell Industries shares are held by institutional investors. Comparatively, 85.2% of Anadarko Petroleum shares are held by institutional investors. 17.6% of Barnwell Industries shares are held by insiders. Comparatively, 0.5% of Anadarko Petroleum shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Barnwell Industries pays an annual dividend of $0.01 per share and has a dividend yield of 0.9%. Anadarko Petroleum pays an annual dividend of $1.04 per share and has a dividend yield of 5.0%. Barnwell Industries pays out -1.6% of its earnings in the form of a dividend. Anadarko Petroleum pays out 452.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Barnwell Industries has a beta of -0.04, indicating that its share price is 104% less volatile than the S&P 500. Comparatively, Anadarko Petroleum has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Barnwell Industries and Anadarko Petroleum, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barnwell Industries	0	0	0	0	0.00
Anadarko Petroleum	0	1	3	2	3.17

Anadarko Petroleum has a consensus target price of $21.60, indicating a potential upside of 3.45%. Given Anadarko Petroleum’s stronger consensus rating and higher possible upside, analysts clearly believe Anadarko Petroleum is more favorable than Barnwell Industries.

Valuation and Earnings

This table compares Barnwell Industries and Anadarko Petroleum”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barnwell Industries	$12.51 million	1.16	-$5.57 million	($0.64)	-1.80
Anadarko Petroleum	$5.58 billion	0.05	$615.00 million	$0.23	90.78

Anadarko Petroleum has higher revenue and earnings than Barnwell Industries. Barnwell Industries is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Summary

Anadarko Petroleum beats Barnwell Industries on 14 of the 17 factors compared between the two stocks.

About Barnwell Industries

Barnwell Industries, Inc. acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. It also acquires and develops crude oil and natural gas assets in the province of Alberta, as well as invests in land interests in Hawaii. In addition, the company owns and operates threes water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; and drills water and water monitoring wells of varying depths. Further, it installs and repairs water pumping systems; and distributes trillium flow technologies. Barnwell Industries, Inc. was incorporated in 1956 and is based in Honolulu, Hawaii.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, Texas.