California Resources (NYSE:CRC) and Coterra Energy (NYSE:CTRA) Critical Contrast

Coterra Energy (NYSE:CTRA) and California Resources (NYSE:CRC) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Institutional and Insider Ownership

87.9% of Coterra Energy shares are owned by institutional investors. Comparatively, 97.8% of California Resources shares are owned by institutional investors. 1.7% of Coterra Energy shares are owned by insiders. Comparatively, 0.0% of California Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Coterra Energy has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, California Resources has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Dividends

Coterra Energy pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. California Resources pays an annual dividend of $1.55 per share and has a dividend yield of 3.4%. Coterra Energy pays out 51.2% of its earnings in the form of a dividend. California Resources pays out 28.1% 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. Coterra Energy has increased its dividend for 4 consecutive years and California Resources has increased its dividend for 1 consecutive years. Coterra Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Coterra Energy and California Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Coterra Energy	21.91%	9.38%	5.95%
California Resources	17.43%	12.16%	6.15%

Analyst Ratings

This is a summary of current ratings for Coterra Energy and California Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coterra Energy	0	4	17	1	2.86
California Resources	0	2	9	2	3.00

Coterra Energy currently has a consensus price target of $33.50, indicating a potential upside of 31.73%. California Resources has a consensus price target of $61.27, indicating a potential upside of 32.60%. Given California Resources’ stronger consensus rating and higher probable upside, analysts plainly believe California Resources is more favorable than Coterra Energy.

Valuation and Earnings

This table compares Coterra Energy and California Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coterra Energy	$5.93 billion	3.27	$1.63 billion	$1.72	14.78
California Resources	$3.31 billion	1.24	$564.00 million	$5.51	8.39

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

About Coterra Energy

Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company’s properties include the Marcellus Shale with approximately 186,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania; Permian Basin properties with approximately 296,000 net acres located in west Texas and southeast New Mexico; and Anadarko Basin properties with approximately 182,000 net acres located in Oklahoma. It also operates natural gas and saltwater gathering and disposal systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities. Coterra Energy Inc. was incorporated in 1989 and is headquartered in Houston, Texas.

About California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.