Reviewing SandRidge Mississippian Trust II (SDR) & Chesapeake Energy Corporation (CHK)
SandRidge Mississippian Trust II (NYSE: SDR) and Chesapeake Energy Corporation (NYSE:CHK) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.
This table compares SandRidge Mississippian Trust II and Chesapeake Energy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SandRidge Mississippian Trust II||74.71%||13.88%||13.88%|
|Chesapeake Energy Corporation||-9.52%||-16.10%||3.99%|
Volatility & Risk
SandRidge Mississippian Trust II has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Chesapeake Energy Corporation has a beta of 2.02, meaning that its share price is 102% more volatile than the S&P 500.
Earnings & Valuation
This table compares SandRidge Mississippian Trust II and Chesapeake Energy Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SandRidge Mississippian Trust II||$15.52 million||4.23||$11.93 million||$0.24||5.50|
|Chesapeake Energy Corporation||$9.25 billion||0.35||$1.50 billion||($1.83)||-1.99|
Chesapeake Energy Corporation has higher revenue and earnings than SandRidge Mississippian Trust II. Chesapeake Energy Corporation is trading at a lower price-to-earnings ratio than SandRidge Mississippian Trust II, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for SandRidge Mississippian Trust II and Chesapeake Energy Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SandRidge Mississippian Trust II||0||0||0||0||N/A|
|Chesapeake Energy Corporation||3||16||5||0||2.08|
Chesapeake Energy Corporation has a consensus price target of $6.48, indicating a potential upside of 77.95%. Given Chesapeake Energy Corporation’s higher possible upside, analysts plainly believe Chesapeake Energy Corporation is more favorable than SandRidge Mississippian Trust II.
Institutional & Insider Ownership
0.9% of SandRidge Mississippian Trust II shares are held by institutional investors. Comparatively, 64.5% of Chesapeake Energy Corporation shares are held by institutional investors. 1.1% of Chesapeake Energy Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
SandRidge Mississippian Trust II pays an annual dividend of $0.20 per share and has a dividend yield of 15.2%. Chesapeake Energy Corporation does not pay a dividend. SandRidge Mississippian Trust II pays out 83.3% 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 Corporation beats SandRidge Mississippian Trust II on 9 of the 15 factors compared between the two stocks.
About SandRidge Mississippian Trust II
SandRidge Mississippian Trust II is a statutory trust. The royalty interests conveyed by SandRidge Energy, Inc. (SandRidge) from its interests in certain properties in the Mississippian formation in northern Oklahoma and southern Kansas and held by the Trust are referred to as the Royalty Interests. The Trust holds Royalty Interests in specified oil and natural gas properties. The Royalty Interests entitle the Trust to receive approximately 80% of the proceeds from the sale of oil, natural gas and natural gas liquids (NGLs) production attributable to SandRidge’s net revenue interest in approximately 50 wells producing and over 10 additional wells awaiting (together, the Initial Wells), and over 70% of the proceeds from the sale of oil, natural gas and NGL production attributable to SandRidge’s net revenue interest in approximately 200 horizontal oil and natural gas development wells drilled (the Trust Development Wells) within an area of mutual interest (AMI).
About Chesapeake Energy Corporation
Chesapeake Energy Corporation produces natural gas, oil and natural gas liquids (NGL) in the United States. It operates in two segments: Exploration and Production, and Marketing, Gathering and Compression. Exploration and production is engaged in finding and producing oil, natural gas and NGL. Marketing, gathering and compression is engaged in marketing, gathering and compression of oil, natural gas and NGL. As of December 31, 2016, it owned interests in approximately 22,700 oil and natural gas wells. It has a diverse resource base of onshore the United States unconventional natural gas and liquids assets. It has positions in resource plays of the Eagle Ford Shale in South Texas, the Utica Shale in Ohio, the Anadarko Basin in northwestern Oklahoma and the stacked pay in the Powder River Basin in Wyoming. Its natural gas resource plays are the Haynesville/Bossier Shales in northwestern Louisiana and East Texas and the Marcellus Shale in the northern Appalachian Basin in Pennsylvania.
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