Critical Review: California Resources (NYSE:CRC) vs. Birchcliff Energy (OTCMKTS:BIREF)

California Resources (NYSE:CRC) and Birchcliff Energy (OTCMKTS:BIREF) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Insider and Institutional Ownership

97.8% of California Resources shares are held by institutional investors. Comparatively, 0.8% of Birchcliff Energy shares are held by institutional investors. 0.6% of California Resources shares are held by company insiders. Comparatively, 1.5% of Birchcliff Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares California Resources and Birchcliff Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California Resources	$2.93 billion	1.35	$564.00 million	$4.11	10.63
Birchcliff Energy	$428.33 million	2.78	$40.95 million	$0.14	31.30

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

Dividends

California Resources pays an annual dividend of $1.55 per share and has a dividend yield of 3.5%. Birchcliff Energy pays an annual dividend of $0.08 per share and has a dividend yield of 1.8%. California Resources pays out 37.7% of its earnings in the form of a dividend. Birchcliff Energy pays out 57.1% 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. California Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares California Resources and Birchcliff Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
California Resources	17.43%	12.16%	6.15%
Birchcliff Energy	9.39%	2.49%	1.68%

Analyst Ratings

This is a breakdown of current ratings and price targets for California Resources and Birchcliff Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California Resources	0	2	10	1	2.92
Birchcliff Energy	0	0	0	6	4.00

California Resources presently has a consensus target price of $67.08, suggesting a potential upside of 53.48%. Given California Resources’ higher possible upside, analysts plainly believe California Resources is more favorable than Birchcliff Energy.

Risk and Volatility

California Resources has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Birchcliff Energy has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Summary

California Resources beats Birchcliff Energy on 12 of the 17 factors compared between the two stocks.

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.

About Birchcliff Energy

Birchcliff Energy Ltd., an intermediate oil and natural gas company, explores for, develops, and produces natural gas, light oil, condensate, and other natural gas liquids in Western Canada. The company holds interests in the areas of Montney/Doig Resource Play, including the Pouce Coupe and Gordondale properties in Alberta. Birchcliff Energy Ltd. was founded in 2004 and is headquartered in Calgary, Canada.