Contrasting Chesapeake Granite Wash Trust (OTCMKTS:CHKR) and W&T Offshore (NYSE:WTI)

Chesapeake Granite Wash Trust (OTCMKTS:CHKR) and W&T Offshore (NYSE:WTI) 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 valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

This table compares Chesapeake Granite Wash Trust and W&T Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Granite Wash Trust	64.37%	42.41%	42.41%
W&T Offshore	-11.95%	-775.16%	-4.37%

Analyst Recommendations

This is a breakdown of recent ratings for Chesapeake Granite Wash Trust and W&T Offshore, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Granite Wash Trust	0	0	0	0	0.00
W&T Offshore	0	0	1	0	3.00

W&T Offshore has a consensus price target of $7.80, indicating a potential upside of 341.93%. Given W&T Offshore’s stronger consensus rating and higher possible upside, analysts clearly believe W&T Offshore is more favorable than Chesapeake Granite Wash Trust.

Institutional & Insider Ownership

42.9% of W&T Offshore shares are owned by institutional investors. 33.5% of W&T Offshore shares are owned by insiders. 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.

Risk & Volatility

Chesapeake Granite Wash Trust has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Valuation & Earnings

This table compares Chesapeake Granite Wash Trust and W&T Offshore”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Granite Wash Trust	$10.69 million	2.23	$8.05 million	$0.10	5.10
W&T Offshore	$537.26 million	0.48	$15.60 million	($0.43)	-4.10

W&T Offshore has higher revenue and earnings than Chesapeake Granite Wash Trust. W&T Offshore 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.

Dividends

Chesapeake Granite Wash Trust pays an annual dividend of $0.04 per share and has a dividend yield of 7.8%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 2.3%. Chesapeake Granite Wash Trust pays out 40.0% of its earnings in the form of a dividend. W&T Offshore pays out -9.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

W&T Offshore beats Chesapeake Granite Wash Trust on 9 of the 16 factors compared between the two stocks.

About Chesapeake Granite Wash Trust

Chesapeake Granite Wash Trust owns royalty interests in oil, natural gas liquids, and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. It has royalty interests in 69 producing wells and 118 development wells, and in approximately 26,400 net acres of area. The company was incorporated in 2011 and is based in Houston, Texas.

About W&T Offshore

W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.