Anadarko Petroleum (APC) versus Black Stone Minerals (BSM) Head-To-Head Analysis

Anadarko Petroleum (NYSE:APC) and Black Stone Minerals (NYSE:BSM) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Risk & Volatility

Anadarko Petroleum has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Black Stone Minerals has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares Anadarko Petroleum and Black Stone Minerals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anadarko Petroleum 11.49% 8.90% 2.60%
Black Stone Minerals 18.62% 10.87% 5.15%

Institutional and Insider Ownership

85.0% of Anadarko Petroleum shares are held by institutional investors. Comparatively, 14.2% of Black Stone Minerals shares are held by institutional investors. 0.5% of Anadarko Petroleum shares are held by insiders. Comparatively, 25.1% of Black Stone Minerals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Anadarko Petroleum and Black Stone Minerals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Anadarko Petroleum $11.91 billion 2.20 -$456.00 million ($1.96) -26.56
Black Stone Minerals $429.66 million 7.93 $157.18 million $1.01 16.48

Black Stone Minerals has lower revenue, but higher earnings than Anadarko Petroleum. Anadarko Petroleum is trading at a lower price-to-earnings ratio than Black Stone Minerals, indicating that it is currently the more affordable of the two stocks.

Dividends

Anadarko Petroleum pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Black Stone Minerals pays an annual dividend of $1.48 per share and has a dividend yield of 8.9%. Anadarko Petroleum pays out -51.0% of its earnings in the form of a dividend. Black Stone Minerals pays out 146.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Black Stone Minerals has increased its dividend for 2 consecutive years. Black Stone Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Anadarko Petroleum and Black Stone Minerals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anadarko Petroleum 0 4 20 0 2.83
Black Stone Minerals 0 0 4 0 3.00

Anadarko Petroleum presently has a consensus price target of $79.95, suggesting a potential upside of 53.57%. Black Stone Minerals has a consensus price target of $19.67, suggesting a potential upside of 18.19%. Given Anadarko Petroleum’s higher probable upside, research analysts clearly believe Anadarko Petroleum is more favorable than Black Stone Minerals.

Summary

Black Stone Minerals beats Anadarko Petroleum on 10 of the 17 factors compared between the two stocks.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It also engages in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the U.S. onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, and other countries. As of December 31, 2017, it had approximately 1.4 billion barrels of oil equivalent of proved reserves. Anadarko Petroleum Corporation was founded in 1959 and is headquartered in The Woodlands, Texas.

About Black Stone Minerals

Black Stone Minerals, L.P. owns and manages oil and natural gas mineral interests in the United States. The company owns mineral interests in approximately 16.8 million acres, nonparticipating royalty interests in 1.9 million acres, and overriding royalty interests in 2.1 million acres located in 41 states and in 64 onshore basins in the continental United States. As of December 31, 2017, the company had a total estimated proved oil and natural gas reserves of 67,945 barrels of oil equivalent. Black Stone Minerals, L.P. was founded in 1876 and is based in Houston, Texas.

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