Cheniere Energy (NYSE:LNG) vs. APA (NASDAQ:APA) Critical Survey

Cheniere Energy (NYSE:LNG) and APA (NASDAQ:APA) are both large-cap energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Dividends

Cheniere Energy pays an annual dividend of $2.22 per share and has a dividend yield of 1.0%. APA pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. Cheniere Energy pays out 36.5% of its earnings in the form of a dividend. APA pays out 23.3% 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. APA is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Cheniere Energy and APA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheniere Energy	7.23%	38.95%	9.34%
APA	17.38%	20.70%	8.14%

Insider and Institutional Ownership

87.3% of Cheniere Energy shares are held by institutional investors. Comparatively, 83.0% of APA shares are held by institutional investors. 0.6% of Cheniere Energy shares are held by insiders. Comparatively, 0.7% of APA shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Cheniere Energy and APA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheniere Energy	$19.98 billion	2.38	$5.33 billion	$6.08	37.38
APA	$9.22 billion	1.27	$1.43 billion	$4.29	7.70

Cheniere Energy has higher revenue and earnings than APA. APA is trading at a lower price-to-earnings ratio than Cheniere Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Cheniere Energy and APA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheniere Energy	0	3	16	2	2.95
APA	4	18	8	0	2.13

Cheniere Energy currently has a consensus price target of $297.71, indicating a potential upside of 31.01%. APA has a consensus price target of $41.04, indicating a potential upside of 24.27%. Given Cheniere Energy’s stronger consensus rating and higher possible upside, equities analysts plainly believe Cheniere Energy is more favorable than APA.

Summary

Cheniere Energy beats APA on 12 of the 16 factors compared between the two stocks.

About Cheniere Energy

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.

About APA

APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.