Contrasting APA (NYSE:APA) and Chesapeake Energy (NYSE:CHK)

APA (NYSE:APA – Get Rating) and Chesapeake Energy (NYSE:CHK – Get Rating) are both large-cap energy minerals companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Profitability

This table compares APA and Chesapeake Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
APA	N/A	N/A	N/A
Chesapeake Energy	N/A	N/A	N/A

Dividends

APA pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. Chesapeake Energy pays an annual dividend of $2.20 per share and has a dividend yield of 2.8%. APA pays out 16.3% of its earnings in the form of a dividend. Chesapeake Energy pays out 4.6% 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. APA has increased its dividend for 2 consecutive years and Chesapeake Energy has increased its dividend for 1 consecutive years. APA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings for APA and Chesapeake Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
APA	0	0	0	0	N/A
Chesapeake Energy	0	0	0	0	N/A

Valuation and Earnings

This table compares APA and Chesapeake Energy’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
APA	$10.41 billion	1.02	$1.90 billion	$6.15	5.59
Chesapeake Energy	$13.82 billion	0.77	$6.42 billion	$47.99	1.67

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

Insider and Institutional Ownership

80.8% of APA shares are owned by institutional investors. 1.2% of APA shares are owned by company insiders. Comparatively, 0.0% of Chesapeake Energy 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.

Risk and Volatility

APA has a beta of 3.53, meaning that its stock price is 253% more volatile than the S&P 500. Comparatively, Chesapeake Energy has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Summary

APA beats Chesapeake Energy on 7 of the 11 factors compared between the two stocks.

About APA

(Get Rating)

APA Corp. explores for oil and natural gas through its subsidiaries. It produces oil and gas with operations in the United States, Egypt and the United Kingdom, and exploration activities offshore in Suriname. The company was founded in 1954 and is headquartered in Houston, TX.

About Chesapeake Energy

(Get Rating)

Chesapeake Energy Corporation is an American exploration and production company, which is headquartered in Oklahoma City.