Chevron (NYSE:CVX) versus Arc Resources (OTCMKTS:AETUF) Head to Head Analysis

Chevron (NYSE:CVX) and Arc Resources (OTCMKTS:AETUF) are both large-cap energy companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Institutional and Insider Ownership

72.4% of Chevron shares are owned by institutional investors. Comparatively, 2.5% of Arc Resources shares are owned by institutional investors. 0.6% of Chevron shares are owned by company insiders. Comparatively, 0.3% of Arc Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Chevron and Arc Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chevron	$189.03 billion	2.16	$12.30 billion	$10.43	19.80
Arc Resources	$4.35 billion	3.20	$912.59 million	$1.79	13.71

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

Dividends

Chevron pays an annual dividend of $7.12 per share and has a dividend yield of 3.4%. Arc Resources pays an annual dividend of $0.59 per share and has a dividend yield of 2.4%. Chevron pays out 68.3% of its earnings in the form of a dividend. Arc Resources pays out 33.0% 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. Chevron has increased its dividend for 38 consecutive years. Chevron is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Chevron and Arc Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chevron	1	6	21	0	2.71
Arc Resources	1	10	3	0	2.14

Chevron presently has a consensus target price of $210.87, indicating a potential upside of 2.13%. Given Chevron’s stronger consensus rating and higher probable upside, analysts plainly believe Chevron is more favorable than Arc Resources.

Profitability

This table compares Chevron and Arc Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chevron	9.57%	11.09%	6.54%
Arc Resources	19.75%	16.67%	9.09%

Volatility & Risk

Chevron has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Arc Resources has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Summary

Chevron beats Arc Resources on 12 of the 17 factors compared between the two stocks.

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.

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.