VAALCO Energy (NYSE:EGY) and Chesapeake Energy (NASDAQ:EXE) Financial Contrast

VAALCO Energy (NYSE:EGY) and Chesapeake Energy (NASDAQ:EXE) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Profitability

This table compares VAALCO Energy and Chesapeake Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VAALCO Energy	17.93%	15.63%	8.72%
Chesapeake Energy	6.07%	2.74%	2.08%

Dividends

VAALCO Energy pays an annual dividend of $0.25 per share and has a dividend yield of 5.0%. Chesapeake Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.3%. VAALCO Energy pays out 29.4% of its earnings in the form of a dividend. Chesapeake Energy pays out 142.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. VAALCO Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares VAALCO Energy and Chesapeake Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VAALCO Energy	$455.07 million	1.13	$60.35 million	$0.85	5.84
Chesapeake Energy	$4.03 billion	5.65	$2.42 billion	$1.62	60.82

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

Risk and Volatility

VAALCO Energy has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Chesapeake Energy has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Institutional & Insider Ownership

50.3% of VAALCO Energy shares are held by institutional investors. Comparatively, 97.9% of Chesapeake Energy shares are held by institutional investors. 1.3% of VAALCO Energy shares are held by company insiders. Comparatively, 58.0% of Chesapeake Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for VAALCO Energy and Chesapeake Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VAALCO Energy	0	0	1	0	3.00
Chesapeake Energy	0	2	5	1	2.88

VAALCO Energy currently has a consensus target price of $8.00, indicating a potential upside of 61.29%. Chesapeake Energy has a consensus target price of $109.14, indicating a potential upside of 10.77%. Given VAALCO Energy’s stronger consensus rating and higher probable upside, analysts plainly believe VAALCO Energy is more favorable than Chesapeake Energy.

Summary

Chesapeake Energy beats VAALCO Energy on 9 of the 17 factors compared between the two stocks.

About VAALCO Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About Chesapeake Energy

Expand Energy Corporation is an independent natural gas producer principally in the United States. Expand Energy Corporation, formerly known as Chesapeake Energy Corporation, is based in OKLAHOMA CITY.