Canadian Natural Resources (NYSE:CNQ – Get Free Report) and Peabody Energy (NYSE:BTU – Get Free Report) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
Profitability
This table compares Canadian Natural Resources and Peabody Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Canadian Natural Resources | 22.78% | 23.91% | 11.45% |
| Peabody Energy | -4.56% | -5.22% | -3.22% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Canadian Natural Resources and Peabody Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Canadian Natural Resources | 0 | 4 | 7 | 1 | 2.75 |
| Peabody Energy | 1 | 3 | 2 | 0 | 2.17 |
Dividends
Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.6%. Peabody Energy pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. Peabody Energy pays out -20.0% 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. Canadian Natural Resources has increased its dividend for 24 consecutive years and Peabody Energy has increased its dividend for 1 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
74.0% of Canadian Natural Resources shares are owned by institutional investors. Comparatively, 87.4% of Peabody Energy shares are owned by institutional investors. 5.0% of Canadian Natural Resources shares are owned by insiders. Comparatively, 0.5% of Peabody Energy shares are owned 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.
Earnings and Valuation
This table compares Canadian Natural Resources and Peabody Energy”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Canadian Natural Resources | $31.61 billion | 3.23 | $7.74 billion | $4.05 | 12.25 |
| Peabody Energy | $3.86 billion | 0.79 | -$52.90 million | ($1.50) | -16.76 |
Canadian Natural Resources has higher revenue and earnings than Peabody Energy. Peabody Energy is trading at a lower price-to-earnings ratio than Canadian Natural Resources, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Canadian Natural Resources has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Peabody Energy has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.
Summary
Canadian Natural Resources beats Peabody Energy on 15 of the 18 factors compared between the two stocks.
About Canadian Natural Resources
Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.
About Peabody Energy
Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.
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