Arc Resources (OTCMKTS:AETUF) vs. BP (NYSE:BP) Head-To-Head Review

BP (NYSE:BP) and Arc Resources (OTCMKTS:AETUF) are both large-cap energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Insider and Institutional Ownership

11.0% of BP shares are owned by institutional investors. Comparatively, 2.5% of Arc Resources shares are owned by institutional investors. 1.0% of BP shares are owned by insiders. Comparatively, 0.3% of Arc Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

BP has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, Arc Resources has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BP and Arc Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BP	2	8	16	1	2.59
Arc Resources	1	10	3	0	2.14

BP presently has a consensus price target of $48.44, suggesting a potential upside of 8.76%. Given BP’s stronger consensus rating and higher possible upside, equities analysts clearly believe BP is more favorable than Arc Resources.

Valuation and Earnings

This table compares BP and Arc Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BP	$192.55 billion	0.61	$55.00 million	$2.05	21.72
Arc Resources	$4.35 billion	3.20	$912.59 million	$1.79	13.71

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

Profitability

This table compares BP and Arc Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BP	2.49%	16.63%	4.39%
Arc Resources	19.75%	16.67%	9.09%

Dividends

BP pays an annual dividend of $2.06 per share and has a dividend yield of 4.6%. Arc Resources pays an annual dividend of $0.59 per share and has a dividend yield of 2.4%. BP pays out 100.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arc Resources pays out 33.0% of its earnings in the form of a dividend.

Summary

BP beats Arc Resources on 10 of the 17 factors compared between the two stocks.

About BP

BP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. It engages in the production of natural gas, and integrated gas and power; trading of gas; operation of onshore and offshore wind power, as well as hydrogen and carbon capture and storage facilities; trading and marketing of renewable and non-renewable power; and production of crude oil. In addition, the company involved in convenience and retail fuel, EV charging, Castrol lubricant, aviation, B2B, and midstream businesses; refining and oil trading; and bioenergy business. The company was founded in 1908 and is headquartered in London, the United Kingdom.

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.