ARC Resources (OTCMKTS:AETUF) & Extraction Oil & Gas (OTCMKTS:XOGAQ) Critical Contrast

Extraction Oil & Gas (OTCMKTS:XOGAQ) and ARC Resources (OTCMKTS:AETUF) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares Extraction Oil & Gas and ARC Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extraction Oil & Gas	$906.64 million	0.01	-$1.39 billion	($0.46)	-0.13
ARC Resources	$4.19 billion	2.46	$1.18 billion	$1.54	11.35

ARC Resources has higher revenue and earnings than Extraction Oil & Gas. Extraction Oil & Gas is trading at a lower price-to-earnings ratio than ARC Resources, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Extraction Oil & Gas and ARC Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extraction Oil & Gas	0	0	0	0	0.00
ARC Resources	0	0	1	2	3.67

ARC Resources has a consensus price target of $25.00, suggesting a potential upside of 43.02%. Given ARC Resources’ stronger consensus rating and higher possible upside, analysts clearly believe ARC Resources is more favorable than Extraction Oil & Gas.

Profitability

This table compares Extraction Oil & Gas and ARC Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extraction Oil & Gas	-223.86%	-56.20%	-11.52%
ARC Resources	26.33%	16.60%	10.02%

Insider & Institutional Ownership

38.6% of Extraction Oil & Gas shares are owned by institutional investors. Comparatively, 2.5% of ARC Resources shares are owned by institutional investors. 6.0% of Extraction Oil & Gas shares are owned by insiders. Comparatively, 0.3% of ARC Resources 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.

Volatility & Risk

Extraction Oil & Gas has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500. Comparatively, ARC Resources has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Summary

ARC Resources beats Extraction Oil & Gas on 12 of the 15 factors compared between the two stocks.

About Extraction Oil & Gas

Extraction Oil & Gas, Inc., an independent oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquid reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg (DJ) Basin of Colorado. The company also engages in the construction and support of midstream assets to gather, process, and produce crude oil and gas. As of December 31, 2019, it had approximately 169,900 net acres of contiguous acreage blocks in the productive areas of the DJ Basin; held approximately 125,500 net acres outside of the Core DJ Basin; had estimated proved reserves of approximately 254.1 MMBoe; and had 1,509 gross producing wells. The company was founded in 2012 and is headquartered in Denver, Colorado. On June 14, 2020, Extraction Oil & Gas, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About ARC Resources

ARC Resources Ltd. engages in the acquiring and developing crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney basin located in Alberta and northeast British Columbia. ARC Resources Ltd. was founded in 1996 and is based in Calgary, Canada.