Northern Oil and Gas (NYSE:NOG) versus ARC Resources (OTCMKTS:AETUF) Critical

ARC Resources (OTCMKTS:AETUF – Get Free Report) and Northern Oil and Gas (NYSE:NOG – Get Free Report) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Volatility and Risk

ARC Resources has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

Earnings & Valuation

This table compares ARC Resources and Northern Oil and Gas’ top-line revenue, earnings per share and valuation.

ARC Resources has higher revenue and earnings than Northern Oil and Gas. Northern Oil and 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.

Dividends

ARC Resources pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Northern Oil and Gas pays an annual dividend of $1.60 per share and has a dividend yield of 4.0%. ARC Resources pays out 33.8% of its earnings in the form of a dividend. Northern Oil and Gas pays out 25.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Northern Oil and Gas has increased its dividend for 2 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

2.5% of ARC Resources shares are owned by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are owned by institutional investors. 0.3% of ARC Resources shares are owned by insiders. Comparatively, 2.8% of Northern Oil and Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Analyst Ratings

This is a summary of current ratings and price targets for ARC Resources and Northern Oil and Gas, as provided by MarketBeat.

ARC Resources presently has a consensus target price of $21.92, suggesting a potential upside of 15.96%. Northern Oil and Gas has a consensus target price of $48.00, suggesting a potential upside of 19.94%. Given Northern Oil and Gas’ higher possible upside, analysts plainly believe Northern Oil and Gas is more favorable than ARC Resources.

Summary

Northern Oil and Gas beats ARC Resources on 12 of the 17 factors compared between the two stocks.

About ARC Resources

(Get Free Report)

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.

About Northern Oil and Gas

(Get Free Report)

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.

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