Apache (NYSE: APA) and Callon Petroleum (NYSE:CPE) are both mid-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apache $5.35 billion 3.28 -$1.41 billion $1.73 26.62
Callon Petroleum $200.85 million 12.62 -$91.81 million $0.43 29.21

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

Dividends

Apache pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Callon Petroleum does not pay a dividend. Apache pays out 57.8% of its earnings in the form of a dividend.

Institutional & Insider Ownership

94.6% of Apache shares are held by institutional investors. 0.5% of Apache shares are held by insiders. Comparatively, 0.8% of Callon Petroleum shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Apache 10.60% -0.70% -0.25%
Callon Petroleum 30.20% 4.05% 2.96%

Risk & Volatility

Apache has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Callon Petroleum has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Apache and Callon Petroleum, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apache 7 9 2 0 1.72
Callon Petroleum 0 4 19 0 2.83

Apache presently has a consensus target price of $45.38, suggesting a potential downside of 1.47%. Callon Petroleum has a consensus target price of $16.73, suggesting a potential upside of 33.18%. Given Callon Petroleum’s stronger consensus rating and higher probable upside, analysts clearly believe Callon Petroleum is more favorable than Apache.

Summary

Callon Petroleum beats Apache on 12 of the 16 factors compared between the two stocks.

About Apache

Apache Corporation is an independent energy company. The Company explores for, develops, and produces natural gas, crude oil and natural gas liquids. The Company’s production segments include: the United States, Egypt and the United Kingdom North Sea. It also pursues exploration interests in Suriname. In North America, the Company has three onshore regions: The Permian region, The Midcontinent/Gulf Coast region. The Permian region located in West Texas and New Mexico includes the Permian sub-basins, the Midland Basin, Central Basin Platform/Northwest Shelf and Delaware Basin. The Midcontinent/Gulf Coast region includes the Granite Wash, Tonkawa, Canyon Lime, Marmaton, and Cleveland formations of the West Anadarko Basin, the Woodford-SCOOP and Stack plays located in Central Oklahoma, and the Eagle Ford shale in South East Texas.

About Callon Petroleum

Callon Petroleum Company is an independent oil and natural gas company. The Company is engaged in the exploration, development, acquisition and production of oil and natural gas properties. The Company focuses on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and southeastern New Mexico and consisted of three primary sub-basins: the Midland Basin, the Delaware Basin, and the Central Basin Platform as of December 31, 2016. The Company’s drilling activity focuses on the horizontal development of various prospective intervals in the Midland Basin, including multiple levels of the Wolfcamp formation and the Lower Spraberry shale. It owns additional immaterial properties in Louisiana. As of December 31, 2016, the Company had owned leaseholds in 39,570 net acres in the Permian Basin, all of which was located in the Midland Basin.

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