Financial Survey: Approach Resources (AREX) & CNOOC Limited (CEO)
Approach Resources (NASDAQ: AREX) and CNOOC Limited (NYSE:CEO) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.
This table compares Approach Resources and CNOOC Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
CNOOC Limited pays an annual dividend of $4.91 per share and has a dividend yield of 4.1%. Approach Resources does not pay a dividend.
This is a summary of recent ratings for Approach Resources and CNOOC Limited, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Approach Resources presently has a consensus target price of $3.10, suggesting a potential upside of 20.62%. CNOOC Limited has a consensus target price of $131.00, suggesting a potential upside of 10.38%. Given Approach Resources’ higher probable upside, equities research analysts clearly believe Approach Resources is more favorable than CNOOC Limited.
Risk & Volatility
Approach Resources has a beta of 2.78, suggesting that its share price is 178% more volatile than the S&P 500. Comparatively, CNOOC Limited has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.
Institutional & Insider Ownership
24.3% of Approach Resources shares are held by institutional investors. Comparatively, 1.5% of CNOOC Limited shares are held by institutional investors. 7.8% of Approach Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Approach Resources and CNOOC Limited’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Approach Resources||$101.58 million||2.18||$49.31 million||($2.64)||-0.97|
|CNOOC Limited||$25.69 billion||2.06||$15.29 billion||N/A||N/A|
CNOOC Limited has higher revenue and earnings than Approach Resources.
CNOOC Limited beats Approach Resources on 8 of the 13 factors compared between the two stocks.
Approach Resources Company Profile
Approach Resources Inc. is an independent energy company. The Company is focused on the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater Permian Basin in West Texas. The Company’s business segment is the exploration and production of oil, natural gas liquids (NGLs) and natural gas. The Company’s assets cover an area of approximately 126,000 net acres. Its proved reserves are approximately 166.6 million barrels of oil equivalent. The Company’s proved reserves are primarily located in Crockett and Schleicher Counties, Texas. The Company’s Permian Basin acreage is known as the Project Pangea. The Company owns and operates approximately 800 producing oil and gas wells in the Permian Basin. The Company, through a joint venture with EnCana Oil & Gas (USA) Inc., holds interests in the approximately 3,000 gross acre project in Limestone and Robertson Counties, Texas, in the East Texas Cotton Valley trend.
CNOOC Limited Company Profile
CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The Company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The Corporate segment is engaged in corporate-related businesses. The Company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.
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