Comparing ARC Resources (OTCMKTS:AETUF) & Parsley Energy (PE)

Parsley Energy (NYSE:PE) and ARC Resources (OTCMKTS:AETUF) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Profitability

This table compares Parsley Energy and ARC Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parsley Energy 14.09% 6.05% 4.04%
ARC Resources 0.78% 0.35% 0.21%

Dividends

ARC Resources pays an annual dividend of $0.45 per share and has a dividend yield of 8.3%. Parsley Energy does not pay a dividend.

Earnings and Valuation

This table compares Parsley Energy and ARC Resources’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Parsley Energy $1.83 billion 3.09 $369.13 million $1.41 12.65
ARC Resources $1.16 billion 1.66 $164.94 million N/A N/A

Parsley Energy has higher revenue and earnings than ARC Resources.

Risk & Volatility

Parsley Energy has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, ARC Resources has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Institutional and Insider Ownership

83.2% of Parsley Energy shares are held by institutional investors. 12.1% of Parsley Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Parsley Energy and ARC Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parsley Energy 0 3 25 1 2.93
ARC Resources 0 0 3 0 3.00

Parsley Energy presently has a consensus target price of $31.19, suggesting a potential upside of 74.92%. Given Parsley Energy’s higher possible upside, equities research analysts clearly believe Parsley Energy is more favorable than ARC Resources.

Summary

Parsley Energy beats ARC Resources on 11 of the 15 factors compared between the two stocks.

About Parsley Energy

Parsley Energy, Inc., an independent oil and natural gas company, engages in the acquisition, development, exploration, production, and sale of crude oil and natural gas properties in the Permian Basin in west Texas and Southeastern New Mexico. As of December 31, 2018, its acreage position consisted of 198,946 net acres, including 154,107 net acres in the Midland Basin and 44,839 net acres in the Delaware Basin; and operated 425.3 net acres of the horizontal wells and 735.7 net acres of the vertical wells, as well an estimated proved oil, natural gas, and natural gas liquid reserves of 521.7 MMBoe. The company was founded in 2008 and is headquartered in Austin, Texas.

About ARC Resources

ARC Resources Ltd., together with its subsidiaries, acquires, develops, and holds interest in petroleum and natural gas properties and assets in Canada. The company holds interests in the Montney properties located in northeast British Columbia and northern Alberta; and Cardium properties in the Pembina area of Alberta. ARC Resources Ltd. was founded in 1996 and is headquartered in Calgary, Canada.

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