Critical Review: Chesapeake Energy (EXE) versus The Competition

Chesapeake Energy (NASDAQ:EXE) is one of 286 publicly-traded companies in the “Crude petroleum & natural gas” industry, but how does it weigh in compared to its peers? We will compare Chesapeake Energy to related businesses based on the strength of its earnings, dividends, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and target prices for Chesapeake Energy and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Energy	0	2	3	1	2.83
Chesapeake Energy Competitors	2161	11624	16205	624	2.50

Chesapeake Energy currently has a consensus price target of $99.20, indicating a potential upside of 7.25%. As a group, “Crude petroleum & natural gas” companies have a potential upside of 22.26%. Given Chesapeake Energy’s peers higher probable upside, analysts clearly believe Chesapeake Energy has less favorable growth aspects than its peers.

Profitability

This table compares Chesapeake Energy and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Energy	6.07%	2.74%	2.08%
Chesapeake Energy Competitors	-3.44%	6.24%	6.60%

Dividends

Chesapeake Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.5%. Chesapeake Energy pays out 142.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Crude petroleum & natural gas” companies pay a dividend yield of 10.6% and pay out 118.4% of their earnings in the form of a dividend. Chesapeake Energy lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings & Valuation

This table compares Chesapeake Energy and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Chesapeake Energy	$4.03 billion	$2.42 billion	57.09
Chesapeake Energy Competitors	$12.31 billion	$1.07 billion	-604.98

Chesapeake Energy’s peers have higher revenue, but lower earnings than Chesapeake Energy. Chesapeake Energy is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

97.9% of Chesapeake Energy shares are owned by institutional investors. Comparatively, 53.3% of shares of all “Crude petroleum & natural gas” companies are owned by institutional investors. 58.0% of Chesapeake Energy shares are owned by insiders. Comparatively, 9.9% of shares of all “Crude petroleum & natural gas” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Chesapeake Energy has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Chesapeake Energy’s peers have a beta of -13.38, suggesting that their average share price is 1,438% less volatile than the S&P 500.

Summary

Chesapeake Energy beats its peers on 8 of the 15 factors compared.

Chesapeake Energy Company Profile

Expand Energy Corporation is an independent natural gas producer principally in the United States. Expand Energy Corporation, formerly known as Chesapeake Energy Corporation, is based in OKLAHOMA CITY.