Head-To-Head Analysis: Penn Virginia (PVAC) vs. Chesapeake Energy (CHK)

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

Volatility and Risk

Penn Virginia has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Chesapeake Energy has a beta of 2.44, suggesting that its share price is 144% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Penn Virginia 50.99% 48.83% 15.29%
Chesapeake Energy 8.31% -58.05% 7.82%

Earnings & Valuation

This table compares Penn Virginia and Chesapeake Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Penn Virginia $440.83 million 1.41 $224.79 million $9.19 4.48
Chesapeake Energy $10.23 billion 0.46 $873.00 million $0.90 3.23

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

Institutional and Insider Ownership

99.0% of Penn Virginia shares are owned by institutional investors. Comparatively, 58.8% of Chesapeake Energy shares are owned by institutional investors. 0.4% of Penn Virginia shares are owned by insiders. Comparatively, 1.9% of Chesapeake 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 Recommendations

This is a summary of current ratings and target prices for Penn Virginia and Chesapeake Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Penn Virginia 0 1 3 0 2.75
Chesapeake Energy 7 8 2 0 1.71

Penn Virginia presently has a consensus target price of $109.00, suggesting a potential upside of 164.63%. Chesapeake Energy has a consensus target price of $3.98, suggesting a potential upside of 36.77%. Given Penn Virginia’s stronger consensus rating and higher probable upside, analysts clearly believe Penn Virginia is more favorable than Chesapeake Energy.

Summary

Penn Virginia beats Chesapeake Energy on 10 of the 14 factors compared between the two stocks.

About Penn Virginia

Penn Virginia Corporation, an independent oil and gas company, engages in the onshore exploration, development, and production of crude oil, natural gas liquids, and natural gas in the United States. It primarily operates wells in the Eagle Ford Shale field in South Texas. As of December 31, 2018, it had total proved reserves of approximately 123 million barrels of oil equivalent; and 460 gross productive wells, as well as owned approximately 98,200 gross acres of leasehold and royalty interests. Penn Virginia Corporation was founded in 1882 and is headquartered in Houston, Texas.

About Chesapeake Energy

Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids (NGL) from underground reservoirs in the United States. The company holds interests in natural gas resource plays, including the Haynesville/Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin in Pennsylvania. It also holds interests in liquids-rich resource plays, such as 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. The company owns interests in approximately 17,300 oil and natural gas wells. As of December 31, 2017, it had estimated proved reserves of 1.116 billion barrels of oil equivalent. The company also provides oil, natural gas, and NGL marketing services comprising commodity price structuring, securing and negotiating gathering, hauling, processing and transportation, contract administration, and nomination services for Chesapeake-operated wells; and marketing services for third-party producers. Chesapeake Energy Corporation was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.

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