Reviewing Chesapeake Granite Wash Trust (OTCMKTS:CHKR) & ARC Resources (OTCMKTS:AETUF)

Chesapeake Granite Wash Trust (OTCMKTS:CHKR) and ARC Resources (OTCMKTS:AETUF) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Dividends

Chesapeake Granite Wash Trust pays an annual dividend of $0.04 per share and has a dividend yield of 8.2%. ARC Resources pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Chesapeake Granite Wash Trust pays out 40.0% of its earnings in the form of a dividend. ARC Resources pays out 38.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Chesapeake Granite Wash Trust and ARC Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Granite Wash Trust	0	0	0	0	0.00
ARC Resources	0	0	0	2	4.00

Earnings & Valuation

This table compares Chesapeake Granite Wash Trust and ARC Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Granite Wash Trust	$10.69 million	2.14	$8.05 million	$0.10	4.90
ARC Resources	$2.98 billion	3.74	$820.37 million	$1.37	13.77

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

Insider & Institutional Ownership

2.5% of ARC Resources shares are held by institutional investors. 0.3% of ARC Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Chesapeake Granite Wash Trust and ARC Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Granite Wash Trust	64.37%	42.41%	42.41%
ARC Resources	24.40%	14.48%	8.76%

Volatility and Risk

Chesapeake Granite Wash Trust has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, ARC Resources has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Summary

ARC Resources beats Chesapeake Granite Wash Trust on 11 of the 15 factors compared between the two stocks.

About Chesapeake Granite Wash Trust

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. It has royalty interests in 69 producing wells and 118 development wells, and in approximately 26,400 net acres of area. The company was incorporated in 2011 and is based in Houston, Texas.

About ARC Resources

ARC Resources Ltd. engages in the acquiring and developing crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney basin located in Alberta and northeast British Columbia. ARC Resources Ltd. was founded in 1996 and is based in Calgary, Canada.