Chesapeake Energy (NYSE: CHK) and Energen (NYSE:EGN) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Volatility & Risk

Chesapeake Energy has a beta of 2.13, indicating that its share price is 113% more volatile than the S&P 500. Comparatively, Energen has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Chesapeake Energy 2.77% -19.93% 4.34%
Energen -1.17% -0.45% -0.30%

Institutional & Insider Ownership

64.0% of Chesapeake Energy shares are owned by institutional investors. Comparatively, 96.1% of Energen shares are owned by institutional investors. 1.1% of Chesapeake Energy shares are owned by insiders. Comparatively, 1.0% of Energen shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chesapeake Energy $7.87 billion 0.42 -$4.40 billion ($0.34) -10.82
Energen $532.89 million 9.91 -$167.51 million ($0.11) -494.09

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Chesapeake Energy and Energen, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Energy 4 12 5 0 2.05
Energen 0 10 14 0 2.58

Chesapeake Energy presently has a consensus target price of $5.68, suggesting a potential upside of 54.21%. Energen has a consensus target price of $66.19, suggesting a potential upside of 21.79%. Given Chesapeake Energy’s higher possible upside, analysts plainly believe Chesapeake Energy is more favorable than Energen.

Summary

Energen beats Chesapeake Energy on 7 of the 13 factors compared between the two stocks.

About Chesapeake Energy

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.

About Energen

Energen Corporation is an oil and natural gas exploration and production company. The Company is engaged in the exploration, development and production of oil and natural gas properties and natural gas. Its operations are conducted through subsidiary, Energen Resources Corporation and occur within the Midland Basin, the Delaware Basin and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico. The Company is focused on increasing its oil, natural gas liquids and natural gas production and proved reserves through active development and/or exploratory programs in the Permian Basin. As of December 31, 2016, oil, natural gas liquids and natural gas represented approximately 60%, 20% and 20% of its reserves. As of December 31, 2016, its development activities added approximately 327 million barrels of oil equivalent (MMBOE) of reserves from the drilling of 623 gross development, exploratory and service wells and 73 well recompletions and pay-adds.

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