Critical Survey: Callon Petroleum (NYSE:CPE) versus Anadarko Petroleum (NYSE:APC)

Callon Petroleum (NYSE:CPE) and Anadarko Petroleum (NYSE:APC) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Volatility and Risk

Callon Petroleum has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, Anadarko Petroleum has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500.

Dividends

Anadarko Petroleum pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Callon Petroleum does not pay a dividend. Anadarko Petroleum pays out 53.1% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Callon Petroleum and Anadarko Petroleum’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Callon Petroleum $587.62 million 1.77 $300.36 million $0.82 5.57
Anadarko Petroleum $13.38 billion 2.77 $615.00 million $2.26 32.64

Anadarko Petroleum has higher revenue and earnings than Callon Petroleum. Callon Petroleum is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

85.3% of Anadarko Petroleum shares are held by institutional investors. 0.6% of Callon Petroleum shares are held by company insiders. Comparatively, 0.5% of Anadarko Petroleum shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Callon Petroleum and Anadarko Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callon Petroleum 36.70% 7.55% 4.65%
Anadarko Petroleum -4.20% 10.49% 2.68%

Analyst Recommendations

This is a summary of current recommendations and price targets for Callon Petroleum and Anadarko Petroleum, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callon Petroleum 0 4 17 0 2.81
Anadarko Petroleum 1 22 4 0 2.11

Callon Petroleum presently has a consensus target price of $12.29, indicating a potential upside of 169.02%. Anadarko Petroleum has a consensus target price of $70.31, indicating a potential downside of 4.67%. Given Callon Petroleum’s stronger consensus rating and higher probable upside, analysts plainly believe Callon Petroleum is more favorable than Anadarko Petroleum.

Summary

Anadarko Petroleum beats Callon Petroleum on 9 of the 16 factors compared between the two stocks.

About Callon Petroleum

Callon Petroleum Company, an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas and southeastern New Mexico. As of December 31, 2018, its estimated net proved reserves totaled 238.5 million barrel of oil equivalent, including 180.1 MMBbls of oil and 350.5 Bcf of natural gas. The company was founded in 1950 and is headquartered in Houston, Texas.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, Texas.

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