Reviewing ARC Resources (AETUF) and WPX Energy (WPX)

ARC Resources (OTCMKTS:AETUF) and WPX Energy (NYSE:WPX) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Valuation and Earnings

This table compares ARC Resources and WPX Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARC Resources $945.11 million 3.78 $299.99 million N/A N/A
WPX Energy $1.34 billion 5.70 -$16.00 million ($0.42) -43.17

ARC Resources has higher earnings, but lower revenue than WPX Energy.

Insider & Institutional Ownership

0.0% of ARC Resources shares are owned by institutional investors. Comparatively, 93.7% of WPX Energy shares are owned by institutional investors. 1.5% of WPX Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for ARC Resources and WPX Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARC Resources 0 1 0 0 2.00
WPX Energy 0 1 24 1 3.00

WPX Energy has a consensus price target of $22.96, indicating a potential upside of 26.64%. Given WPX Energy’s stronger consensus rating and higher possible upside, analysts plainly believe WPX Energy is more favorable than ARC Resources.

Dividends

ARC Resources pays an annual dividend of $0.46 per share and has a dividend yield of 4.6%. WPX Energy does not pay a dividend.

Volatility and Risk

ARC Resources has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, WPX Energy has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
ARC Resources 10.19% 3.67% 2.17%
WPX Energy -30.02% -0.97% -0.46%

Summary

WPX Energy beats ARC Resources on 9 of the 15 factors compared between the two stocks.

ARC Resources Company Profile

ARC Resources Ltd., together with its subsidiaries, engages in the acquisition, exploration, development, and production of crude oil, natural gas, condensate, and natural gas liquids. The company primarily holds interests in the Montney resource play properties located in northeast British Columbia and northern Alberta; and other assets located in the Cardium formation in the Pembina area of Alberta. As of December 31, 2017, it had proved plus probable reserves of 836.1 MMboe. The company was founded in 1996 and is headquartered in Calgary, Canada.

WPX Energy Company Profile

WPX Energy, Inc., an independent oil and natural gas exploration and production company, engages in the exploitation and development of unconventional properties in the United States. The company's principal areas of operation include the Delaware Basin in Texas and New Mexico; the Williston Basin in North Dakota; and the San Juan Basin in New Mexico and Colorado. As of December 31, 2017, it had proved reserves of 436 million barrels of oil equivalent. The company was incorporated in 2011 and is headquartered in Tulsa, Oklahoma.

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