Chesapeake Energy (NYSE: CHK) and Whiting Petroleum (NYSE:WLL) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.
Volatility & Risk
Chesapeake Energy has a beta of 2.13, suggesting that its share price is 113% more volatile than the S&P 500. Comparatively, Whiting Petroleum has a beta of 3.4, suggesting that its share price is 240% more volatile than the S&P 500.
This table compares Chesapeake Energy and Whiting Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
64.0% of Chesapeake Energy shares are owned by institutional investors. 1.1% of Chesapeake Energy shares are owned by insiders. Comparatively, 1.2% of Whiting Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a summary of recent ratings for Chesapeake Energy and Whiting Petroleum, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Chesapeake Energy currently has a consensus target price of $5.48, suggesting a potential upside of 55.98%. Whiting Petroleum has a consensus target price of $33.15, suggesting a potential upside of 48.44%. Given Chesapeake Energy’s higher probable upside, analysts clearly believe Chesapeake Energy is more favorable than Whiting Petroleum.
Valuation and Earnings
This table compares Chesapeake Energy and Whiting Petroleum’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chesapeake Energy||$7.87 billion||0.41||-$4.40 billion||($0.34)||-10.32|
|Whiting Petroleum||$1.28 billion||1.58||-$1.34 billion||($7.20)||-3.10|
Whiting Petroleum has lower revenue, but higher earnings than Chesapeake Energy. Chesapeake Energy is trading at a lower price-to-earnings ratio than Whiting Petroleum, indicating that it is currently the more affordable of the two stocks.
Whiting Petroleum beats Chesapeake Energy on 7 of the 13 factors compared between the two stocks.
Chesapeake Energy Company Profile
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.
Whiting Petroleum Company Profile
Whiting Petroleum Corporation is an independent oil and gas company. The Company is engaged in development, production, acquisition and exploration activities primarily in the Rocky Mountains region of the United States. It is engaged in the exploration and production of crude oil, natural gas liquid (NGLs) and natural gas. Its Northern Rocky Mountains operations included properties in the Williston Basin of North Dakota and Montana targeting the Bakken and Three Forks formations and encompassing approximately 736,000 gross developed and undeveloped acres, as of December 31, 2016. Its Central Rocky Mountains operations included properties at its Redtail field in the Denver Julesburg Basin in Weld County, Colorado targeting the Niobrara and Codell/Fort Hays formations and encompassing approximately 157,200 gross developed and undeveloped acres, as of December 31, 2016. Its other operations primarily relate to non-core assets in Colorado, Mississippi, North Dakota, Texas and Wyoming.
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