Chesapeake Granite Wash Trust (NYSE: CHKR) and ECA Marcellus Trust I (NYSE:ECT) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.
This is a breakdown of current recommendations and price targets for Chesapeake Granite Wash Trust and ECA Marcellus Trust I, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chesapeake Granite Wash Trust||0||0||0||0||N/A|
|ECA Marcellus Trust I||0||0||0||0||N/A|
Risk and Volatility
Chesapeake Granite Wash Trust has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, ECA Marcellus Trust I has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.
This table compares Chesapeake Granite Wash Trust and ECA Marcellus Trust I’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chesapeake Granite Wash Trust||85.99%||39.29%||39.29%|
|ECA Marcellus Trust I||84.94%||10.54%||10.27%|
Chesapeake Granite Wash Trust pays an annual dividend of $0.38 per share and has a dividend yield of 17.7%. ECA Marcellus Trust I pays an annual dividend of $0.40 per share and has a dividend yield of 17.0%. Chesapeake Granite Wash Trust pays out 108.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ECA Marcellus Trust I pays out 121.2% 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 Granite Wash Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Chesapeake Granite Wash Trust and ECA Marcellus Trust I’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Chesapeake Granite Wash Trust||$13.72 million||7.33||$16.36 million||$0.35||6.14|
|ECA Marcellus Trust I||$6.85 million||6.04||$5.81 million||$0.33||7.12|
Chesapeake Granite Wash Trust has higher revenue and earnings than ECA Marcellus Trust I. Chesapeake Granite Wash Trust is trading at a lower price-to-earnings ratio than ECA Marcellus Trust I, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
1.1% of Chesapeake Granite Wash Trust shares are owned by institutional investors. Comparatively, 2.8% of ECA Marcellus Trust I shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Chesapeake Granite Wash Trust beats ECA Marcellus Trust I on 9 of the 12 factors compared between the two stocks.
About Chesapeake Granite Wash Trust
Chesapeake Granite Wash Trust (the Trust) is a trust formed to own royalty interests for the benefit of Trust unit holders. The royalty interests held by the Trust (Royalty Interests) are derived from Chesapeake Energy Corporation’s (Chesapeake) interests in specified oil and natural gas properties located in the Colony Granite Wash play in Washita County. Chesapeake conveyed the Royalty Interests to the Trust from its interests in approximately 70 existing horizontal wells (Producing Wells) and Chesapeake’s interests in over 120 horizontal development wells (Development Wells) to be drilled on properties within the Area of Mutual Interest (AMI). The AMI lies within Washita County in western Oklahoma and is limited to Colony Granite Wash formation, where Chesapeake holds approximately 40,500 gross acres. Chesapeake has drilled and completed over 90 wells within the AMI. The Colony Granite Wash is located at the eastern end of Des Moines-age granite wash fields.
About ECA Marcellus Trust I
ECA Marcellus Trust I (the Trust) is a statutory trust. The Trust is formed by Energy Corporation of America (ECA) to own royalty interests in natural gas properties owned and operated by ECA in the Marcellus Shale formation in Greene County, Pennsylvania. The Trust does not conduct any operations or activities. The Trust’s purpose is, in general, to hold the Royalty Interests to distribute to the Trust unitholders cash and to perform certain administrative functions in respect of the Royalty Interests and the Trust units. The Trust owns royalty interests in over 10 Producing Wells (the Producing Wells), and royalty interests in over 50 horizontal natural gas development wells to be drilled to the Marcellus Shale formation (the PUD Wells) within the area of mutual interest (AMI), in which ECA holds approximately 9,300 acres, of which it owned all of the working interests, in Greene County, Pennsylvania. It owns Royalty Interests in over 40 development wells that are in production.
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