ARC Resources (OTCMKTS:AETUF) versus Chesapeake Granite Wash Trust (OTCMKTS:CHKR) Financial Survey

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

Analyst Ratings

This is a breakdown of recent ratings 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

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%

Dividends

Chesapeake Granite Wash Trust pays an annual dividend of $0.04 per share and has a dividend yield of 8.3%. 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.

Valuation & Earnings

This table compares Chesapeake Granite Wash Trust and ARC Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Granite Wash Trust	$10.69 million	2.10	$8.05 million	$0.10	4.80
ARC Resources	$2.98 billion	3.64	$820.37 million	$1.37	13.42

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.

Volatility & Risk

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

Institutional and Insider Ownership

2.5% of ARC Resources shares are held by institutional investors. 0.3% of ARC Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

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.