Chesapeake Energy Corporation (NYSE: CHK) and PDC Energy (NASDAQ:PDCE) are both mid-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional and Insider Ownership

64.6% of Chesapeake Energy Corporation shares are owned by institutional investors. 1.1% of Chesapeake Energy Corporation shares are owned by company insiders. Comparatively, 0.9% of PDC Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Chesapeake Energy Corporation and PDC Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chesapeake Energy Corporation $9.25 billion 0.40 $1.50 billion ($1.83) -2.30
PDC Energy $677.42 million 4.59 $550.18 million ($0.10) -475.35

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Chesapeake Energy Corporation and PDC Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chesapeake Energy Corporation 3 17 5 0 2.08
PDC Energy 0 10 12 0 2.55

Chesapeake Energy Corporation currently has a consensus target price of $6.20, indicating a potential upside of 47.52%. PDC Energy has a consensus target price of $70.15, indicating a potential upside of 47.56%. Given PDC Energy’s stronger consensus rating and higher possible upside, analysts plainly believe PDC Energy is more favorable than Chesapeake Energy Corporation.

Profitability

This table compares Chesapeake Energy Corporation and PDC Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chesapeake Energy Corporation -9.52% -16.10% 3.99%
PDC Energy 1.03% 0.53% 0.31%

Risk & Volatility

Chesapeake Energy Corporation has a beta of 2.07, meaning that its share price is 107% more volatile than the S&P 500. Comparatively, PDC Energy has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

PDC Energy beats Chesapeake Energy Corporation on 7 of the 13 factors compared between the two stocks.

Chesapeake Energy Corporation Company Profile

Chesapeake Energy Corporation produces natural gas, oil and natural gas liquids (NGL) in the United States. It operates in two segments: Exploration and Production, and Marketing, Gathering and Compression. Exploration and production is engaged in finding and producing oil, natural gas and NGL. Marketing, gathering and compression is engaged in marketing, gathering and compression of oil, natural gas and NGL. As of December 31, 2016, it owned interests in approximately 22,700 oil and natural gas wells. It has a diverse resource base of onshore the United States unconventional natural gas and liquids assets. It has positions in resource plays of the Eagle Ford Shale in South Texas, the Utica Shale in Ohio, the Anadarko Basin in northwestern Oklahoma and the stacked pay in the Powder River Basin in Wyoming. Its natural gas resource plays are the Haynesville/Bossier Shales in northwestern Louisiana and East Texas and the Marcellus Shale in the northern Appalachian Basin in Pennsylvania.

PDC Energy Company Profile

PDC Energy, Inc. is an independent exploration and production company. The Company produces, develops, acquires and explores for crude oil, natural gas and natural gas liquids (NGLs) with operations in the Wattenberg Field in Colorado and the Utica Shale in southeastern Ohio. The Company operates through two segments: Oil and Gas Exploration and Production, and Gas Marketing. The Company’s Oil and Gas Exploration and Production segment includes all of its crude oil and natural gas properties. The Company’s Gas Marketing segment purchases, aggregates and resells natural gas. The Company’s operations in the Wattenberg Field are focused on the horizontal Niobrara and Codell plays. Its Delaware Basin operations are focused in the Wolfcamp zones and its Ohio operations are focused in the Utica Shale play. As of December 31, 2016, the Company owned an interest in approximately 2,900 productive gross wells.

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