Canadian Natural Resources (NYSE:CNQ) & ARC Resources (NYSE:AETUF) Critical Comparison

Canadian Natural Resources (NYSE:CNQ) and ARC Resources (OTCMKTS:AETUF) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Canadian Natural Resources and ARC Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian Natural Resources 1 4 13 0 2.67
ARC Resources 0 1 3 0 2.75

Canadian Natural Resources presently has a consensus price target of $43.43, suggesting a potential upside of 58.26%. Given Canadian Natural Resources’ higher possible upside, analysts clearly believe Canadian Natural Resources is more favorable than ARC Resources.

Institutional & Insider Ownership

65.1% of Canadian Natural Resources shares are owned by institutional investors. 5.0% of Canadian Natural Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Canadian Natural Resources and ARC Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian Natural Resources 22.22% 8.62% 3.82%
ARC Resources 9.81% 2.45% 1.49%

Earnings & Valuation

This table compares Canadian Natural Resources and ARC Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Canadian Natural Resources $17.19 billion 1.90 $2.00 billion $2.15 12.76
ARC Resources $1.16 billion 1.57 $164.94 million N/A N/A

Canadian Natural Resources has higher revenue and earnings than ARC Resources.

Dividends

Canadian Natural Resources pays an annual dividend of $1.13 per share and has a dividend yield of 4.1%. ARC Resources pays an annual dividend of $0.45 per share and has a dividend yield of 8.8%. Canadian Natural Resources pays out 52.6% of its earnings in the form of a dividend. Canadian Natural Resources has increased its dividend for 7 consecutive years.

Risk & Volatility

Canadian Natural Resources has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, ARC Resources has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Summary

Canadian Natural Resources beats ARC Resources on 12 of the 16 factors compared between the two stocks.

About Canadian Natural Resources

Canadian Natural Resources Limited explores for, develops, produces, and markets crude oil, natural gas, and natural gas liquids (NGLs). The company offers synthetic crude oil (SCO), light and medium crude oil, bitumen (thermal oil), primary heavy crude oil, and Pelican Lake heavy crude oil. Its midstream assets include two crude oil pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. As of December 31, 2017, the company's gross proved crude oil, bitumen, SCO, and NGLs reserves totaled 8,784 million barrels; gross proved plus probable crude oil, bitumen, SCO, and NGLs reserves totaled 11,760 million barrels; proved natural gas reserves totaled 6,652 billion cubic feet; and gross proved plus probable natural gas reserves totaled 9,734 billion cubic feet. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

About ARC Resources

ARC Resources Ltd., together with its subsidiaries, acquires, develops, and holds interest in petroleum and natural gas properties and assets in Canada. The company holds interests in the Montney properties located in northeast British Columbia and northern Alberta; and Cardium properties in the Pembina area of Alberta. ARC Resources Ltd. was founded in 1996 and is headquartered in Calgary, Canada.

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