Continental Resources (NYSE: CLR) and SandRidge Mississippian Trust II (NYSE:SDR) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.
This table compares Continental Resources and SandRidge Mississippian Trust II’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SandRidge Mississippian Trust II||74.71%||13.88%||13.88%|
This is a breakdown of current ratings and recommmendations for Continental Resources and SandRidge Mississippian Trust II, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SandRidge Mississippian Trust II||0||0||0||0||N/A|
Continental Resources presently has a consensus target price of $45.34, suggesting a potential upside of 19.89%. Given Continental Resources’ higher probable upside, research analysts plainly believe Continental Resources is more favorable than SandRidge Mississippian Trust II.
Volatility and Risk
Continental Resources has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, SandRidge Mississippian Trust II has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.
Valuation & Earnings
This table compares Continental Resources and SandRidge Mississippian Trust II’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Continental Resources||$2.37 billion||5.92||$1.75 billion||($0.40)||-94.55|
|SandRidge Mississippian Trust II||$15.52 million||4.26||$11.93 million||$0.24||5.54|
Continental Resources has higher revenue and earnings than SandRidge Mississippian Trust II. Continental Resources is trading at a lower price-to-earnings ratio than SandRidge Mississippian Trust II, indicating that it is currently the more affordable of the two stocks.
SandRidge Mississippian Trust II pays an annual dividend of $0.20 per share and has a dividend yield of 15.0%. Continental Resources does not pay a dividend. SandRidge Mississippian Trust II pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional & Insider Ownership
23.3% of Continental Resources shares are held by institutional investors. Comparatively, 0.9% of SandRidge Mississippian Trust II shares are held by institutional investors. 76.9% of Continental Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Continental Resources beats SandRidge Mississippian Trust II on 9 of the 14 factors compared between the two stocks.
Continental Resources Company Profile
Continental Resources, Inc. is a crude oil and natural gas company with properties in the North, South and East regions of the United States. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken and the Red River units. The South region includes properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province (SCOOP), Sooner Trend Anadarko Canadian Kingfisher (STACK), and Arkoma Woodford areas of Oklahoma. The East region is consists of undeveloped leasehold acreage east of the Mississippi River with no drilling or production operations. As of December 31, 2016, its estimated proved reserves were 1,275 million barrels of oil equivalent (MMBoe), with estimated proved developed reserves of 519 MMBoe. As of December 31, 2016, its average daily production from South region properties was 91,088 barrels of oil equivalent (Boe) per day.
SandRidge Mississippian Trust II Company Profile
SandRidge Mississippian Trust II is a statutory trust. The royalty interests conveyed by SandRidge Energy, Inc. (SandRidge) from its interests in certain properties in the Mississippian formation in northern Oklahoma and southern Kansas and held by the Trust are referred to as the Royalty Interests. The Trust holds Royalty Interests in specified oil and natural gas properties. The Royalty Interests entitle the Trust to receive approximately 80% of the proceeds from the sale of oil, natural gas and natural gas liquids (NGLs) production attributable to SandRidge’s net revenue interest in approximately 50 wells producing and over 10 additional wells awaiting (together, the Initial Wells), and over 70% of the proceeds from the sale of oil, natural gas and NGL production attributable to SandRidge’s net revenue interest in approximately 200 horizontal oil and natural gas development wells drilled (the Trust Development Wells) within an area of mutual interest (AMI).
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