Contrasting Chesapeake Energy (NASDAQ:CHK) and Ecopetrol (NYSE:EC)

Chesapeake Energy (NASDAQ:CHKGet Free Report) and Ecopetrol (NYSE:ECGet Free Report) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Dividends

Chesapeake Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.5%. Ecopetrol pays an annual dividend of $2.48 per share and has a dividend yield of 19.2%. Chesapeake Energy pays out 13.7% of its earnings in the form of a dividend. Ecopetrol pays out 106.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Energy has raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

97.9% of Chesapeake Energy shares are held by institutional investors. 0.1% of Chesapeake Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Chesapeake Energy has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Ecopetrol has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Chesapeake Energy 27.74% 6.74% 4.87%
Ecopetrol 14.58% 10.31% 3.75%

Earnings and Valuation

This table compares Chesapeake Energy and Ecopetrol’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chesapeake Energy $7.78 billion 1.52 $2.42 billion $16.84 5.36
Ecopetrol $37.83 billion N/A $34.77 billion $2.33 5.53

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Chesapeake Energy and Ecopetrol, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Energy 0 4 5 0 2.56
Ecopetrol 2 4 0 0 1.67

Chesapeake Energy presently has a consensus target price of $101.56, suggesting a potential upside of 12.46%. Ecopetrol has a consensus target price of $11.00, suggesting a potential downside of 14.66%. Given Chesapeake Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Chesapeake Energy is more favorable than Ecopetrol.

Summary

Chesapeake Energy beats Ecopetrol on 10 of the 16 factors compared between the two stocks.

About Chesapeake Energy

(Get Free Report)

Chesapeake Energy Corporation operates as an independent exploration and production company in the United States. It engages in acquisition, exploration, and development of properties to produce oil, natural gas, and natural gas liquids from underground reservoirs. The company holds interests in natural gas resource plays in the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana. As of December 31, 2023, the company owns a portfolio of onshore U.S. unconventional natural gas assets, including interests in approximately 5,000 natural gas wells. Chesapeake Energy Corporation was founded in 1989 and is based in Oklahoma City, Oklahoma.

About Ecopetrol

(Get Free Report)

Ecopetrol S.A. operates as an integrated energy company. The company operates through four segments: Exploration and Production; Transport and Logistics; Refining, Petrochemical and Biofuels; and Electric Power Transmission and Toll Roads Concessions. It engages in the exploration and production of oil and gas; transportation of crude oil, motor fuels, fuel oil, and other refined products, including diesel, jet, and biofuels; processing and refining crude oil; distribution of natural gas and LPG; sale of refined and petrochemical products; supplying of electric power transmission services; design, development, construction, operation, and maintenance of road and energy infrastructure projects; and supplying of information technology and telecommunications services. As of December 31, 2022, the company had approximately 9,127 kilometers of crude oil and multi-purpose pipelines. It also produces and commercializes polypropylene resins and compounds, and masterbatches; and offers industrial service sales to customers and specialized management services. It has operations in Colombia, the United States, Asia, Central America and the Caribbean, Europe, and South America. The company was formerly known as Empresa Colombiana de Petróleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was incorporated in 1948 and is headquartered in Bogotá, Colombia.

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