Reviewing California Resources (NYSE:CRC) and Kinetik (NYSE:KNTK)

Kinetik (NYSE:KNTK) and California Resources (NYSE:CRC) are both mid-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations for Kinetik and California Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinetik	0	6	11	2	2.79
California Resources	0	3	10	1	2.86

Kinetik currently has a consensus target price of $54.00, suggesting a potential upside of 3.01%. California Resources has a consensus target price of $74.10, suggesting a potential upside of 41.15%. Given California Resources’ stronger consensus rating and higher possible upside, analysts plainly believe California Resources is more favorable than Kinetik.

Profitability

This table compares Kinetik and California Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinetik	26.19%	-38.96%	7.07%
California Resources	-3.79%	9.82%	4.65%

Dividends

Kinetik pays an annual dividend of $3.24 per share and has a dividend yield of 6.2%. California Resources pays an annual dividend of $1.62 per share and has a dividend yield of 3.1%. Kinetik pays out 117.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. California Resources pays out -119.1% of its earnings in the form of a dividend. Kinetik has increased its dividend for 1 consecutive years and California Resources has increased its dividend for 1 consecutive years.

Valuation and Earnings

This table compares Kinetik and California Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinetik	$1.76 billion	4.82	$525.93 million	$2.76	18.99
California Resources	$3.67 billion	1.27	$363.00 million	($1.36)	-38.60

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

Volatility and Risk

Kinetik has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, California Resources has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Institutional & Insider Ownership

21.1% of Kinetik shares are owned by institutional investors. Comparatively, 97.8% of California Resources shares are owned by institutional investors. 3.6% of Kinetik shares are owned by insiders. Comparatively, 0.5% of California Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Kinetik beats California Resources on 10 of the 17 factors compared between the two stocks.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

About California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.