Comparing ARC Resources (OTCMKTS:AETUF) and Chesapeake Granite Wash Trust (OTCMKTS:CHKR)

ARC Resources (OTCMKTS:AETUF) and Chesapeake Granite Wash Trust (OTCMKTS:CHKR) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Dividends

ARC Resources pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Chesapeake Granite Wash Trust pays an annual dividend of $0.04 per share and has a dividend yield of 8.3%. ARC Resources pays out 38.0% of its earnings in the form of a dividend. Chesapeake Granite Wash Trust pays out 40.0% 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.

Institutional & Insider Ownership

2.5% of ARC Resources shares are owned by institutional investors. 0.3% of ARC Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for ARC Resources and Chesapeake Granite Wash Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARC Resources	0	0	0	2	4.00
Chesapeake Granite Wash Trust	0	0	0	0	0.00

Profitability

This table compares ARC Resources and Chesapeake Granite Wash Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARC Resources	24.40%	14.48%	8.76%
Chesapeake Granite Wash Trust	64.37%	42.41%	42.41%

Volatility & Risk

ARC Resources has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Chesapeake Granite Wash Trust has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Valuation & Earnings

This table compares ARC Resources and Chesapeake Granite Wash Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARC Resources	$2.98 billion	3.64	$820.37 million	$1.37	13.42
Chesapeake Granite Wash Trust	$10.69 million	2.10	$8.05 million	$0.10	4.80

ARC Resources has higher revenue and earnings than Chesapeake Granite Wash Trust. Chesapeake Granite Wash Trust is trading at a lower price-to-earnings ratio than ARC Resources, indicating that it is currently the more affordable of the two stocks.

Summary

ARC Resources beats Chesapeake Granite Wash Trust on 11 of the 15 factors compared between the two stocks.

About ARC Resources

ARC Resources Ltd. engages in the acquiring and developing crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney basin located in Alberta and northeast British Columbia. ARC Resources Ltd. was founded in 1996 and is based in Calgary, Canada.

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.