Clayton Williams Energy (NYSE: CWEI) and Chesapeake Granite Wash Trust (NYSE:CHKR) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.
Insider & Institutional Ownership
67.8% of Clayton Williams Energy shares are held by institutional investors. Comparatively, 0.9% of Chesapeake Granite Wash Trust shares are held by institutional investors. 36.4% of Clayton Williams Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Clayton Williams Energy and Chesapeake Granite Wash Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Clayton Williams Energy||-16.83%||-63.50%||-7.44%|
|Chesapeake Granite Wash Trust||84.71%||43.81%||43.81%|
Valuation & Earnings
This table compares Clayton Williams Energy and Chesapeake Granite Wash Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Clayton Williams Energy||N/A||N/A||N/A||($21.71)||-6.08|
|Chesapeake Granite Wash Trust||$12.43 million||6.77||$12.48 million||$0.28||6.43|
Chesapeake Granite Wash Trust has higher revenue and earnings than Clayton Williams Energy. Clayton Williams Energy is trading at a lower price-to-earnings ratio than Chesapeake Granite Wash Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Clayton Williams Energy and Chesapeake Granite Wash Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Clayton Williams Energy||0||1||0||0||2.00|
|Chesapeake Granite Wash Trust||0||0||0||0||N/A|
Chesapeake Granite Wash Trust pays an annual dividend of $0.26 per share and has a dividend yield of 14.4%. Clayton Williams Energy does not pay a dividend. Chesapeake Granite Wash Trust pays out 92.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk and Volatility
Clayton Williams Energy has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500. Comparatively, Chesapeake Granite Wash Trust has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.
Chesapeake Granite Wash Trust beats Clayton Williams Energy on 7 of the 11 factors compared between the two stocks.
Clayton Williams Energy Company Profile
Clayton Williams Energy, Inc. is an independent oil and gas company engaged in the exploration for and production of oil and natural gas primarily in its core area in Southern Reeves County, Texas. The Company operates through two segments: oil and gas exploration and production, and contract drilling services. The Company focuses on developmental drilling in prolific oil shale provinces. The Company has holdings in the oil shale plays in the United States, the Wolfcamp Shale in the Southern Delaware Basin of West Texas. Its exploration program consists of generating exploratory prospects, leasing the acreage related to these prospects, drilling exploratory wells on these prospects to determine if recoverable oil and gas reserves exist, drilling developmental wells on these prospects and producing and selling any resulting oil and gas production. The Permian Basin is a sedimentary basin in West Texas and Southeastern New Mexico.
Chesapeake Granite Wash Trust Company Profile
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.
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