Financial Survey: Arc Resources (OTCMKTS:AETUF) vs. California Resources (NYSE:CRC)

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

Dividends

Arc Resources pays an annual dividend of $0.59 per share and has a dividend yield of 2.4%. California Resources pays an annual dividend of $1.62 per share and has a dividend yield of 3.5%. Arc Resources pays out 33.0% of its earnings in the form of a dividend. California Resources pays out -28.6% 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. California Resources has increased its dividend for 1 consecutive years. California Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Arc Resources has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, California Resources has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arc Resources	$4.35 billion	3.20	$912.59 million	$1.79	13.71
California Resources	$3.67 billion	1.13	$363.00 million	($5.67)	-8.26

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

Analyst Ratings

This is a summary of recent ratings for Arc Resources and California Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arc Resources	1	10	2	0	2.08
California Resources	1	2	9	1	2.77

California Resources has a consensus price target of $74.44, suggesting a potential upside of 59.03%. Given California Resources’ stronger consensus rating and higher possible upside, analysts plainly believe California Resources is more favorable than Arc Resources.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arc Resources	19.75%	16.67%	9.09%
California Resources	-18.11%	9.56%	4.29%

Institutional & Insider Ownership

2.5% of Arc Resources shares are owned by institutional investors. Comparatively, 97.8% of California Resources shares are owned by institutional investors. 0.3% of Arc Resources shares are owned by insiders. Comparatively, 0.5% of California Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

California Resources beats Arc Resources on 10 of the 18 factors compared between the two stocks.

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.

About California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.