Kinetik (NYSE:KNTK) & California Resources (NYSE:CRC) Critical Comparison

California Resources (NYSE:CRC) and Kinetik (NYSE:KNTK) are both mid-cap energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
California Resources	-3.79%	9.82%	4.65%
Kinetik	26.19%	-38.96%	7.07%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
California Resources	$3.67 billion	1.23	$363.00 million	($1.36)	-37.42
Kinetik	$1.76 billion	4.63	$525.93 million	$2.76	18.22

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

Dividends

California Resources pays an annual dividend of $1.62 per share and has a dividend yield of 3.2%. Kinetik pays an annual dividend of $3.24 per share and has a dividend yield of 6.4%. California Resources pays out -119.1% of its earnings in the form of a dividend. Kinetik pays out 117.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. California Resources has increased its dividend for 1 consecutive years and Kinetik has increased its dividend for 1 consecutive years.

Risk & Volatility

California Resources has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Kinetik has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Insider & Institutional Ownership

97.8% of California Resources shares are owned by institutional investors. Comparatively, 21.1% of Kinetik shares are owned by institutional investors. 0.5% of California Resources shares are owned by insiders. Comparatively, 3.6% of Kinetik 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 Recommendations

This is a summary of current ratings and target prices for California Resources and Kinetik, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
California Resources	0	3	10	1	2.86
Kinetik	0	6	11	2	2.79

California Resources presently has a consensus target price of $74.10, suggesting a potential upside of 45.60%. Kinetik has a consensus target price of $54.00, suggesting a potential upside of 7.36%. Given California Resources’ stronger consensus rating and higher possible upside, equities research analysts clearly believe California Resources is more favorable than Kinetik.

Summary

Kinetik beats California Resources on 10 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 Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.