Critical Survey: Barnwell Industries (NYSE:BRN) & Chesapeake Granite Wash Trust (OTCMKTS:CHKR)

Barnwell Industries (NYSE:BRN) and Chesapeake Granite Wash Trust (OTCMKTS:CHKR) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Profitability

This table compares Barnwell Industries and Chesapeake Granite Wash Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barnwell Industries	-11.35%	-14.70%	-7.70%
Chesapeake Granite Wash Trust	75.26%	77.49%	77.49%

Dividends

Barnwell Industries pays an annual dividend of $0.03 per share and has a dividend yield of 1.0%. Chesapeake Granite Wash Trust pays an annual dividend of $0.08 per share and has a dividend yield of 13.6%. Barnwell Industries pays out -11.1% of its earnings in the form of a dividend. Chesapeake Granite Wash Trust pays out 44.4% 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.

Risk and Volatility

Barnwell Industries has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500. Comparatively, Chesapeake Granite Wash Trust has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Barnwell Industries and Chesapeake Granite Wash Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barnwell Industries	0	0	0	0	N/A
Chesapeake Granite Wash Trust	0	0	0	0	N/A

Valuation & Earnings

This table compares Barnwell Industries and Chesapeake Granite Wash Trust’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barnwell Industries	$25.27 million	1.16	-$960,000.00	($0.27)	-10.78
Chesapeake Granite Wash Trust	$10.69 million	2.58	$8.05 million	$0.18	3.28

Chesapeake Granite Wash Trust has lower revenue, but higher earnings than Barnwell Industries. Barnwell Industries is trading at a lower price-to-earnings ratio than Chesapeake Granite Wash Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

40.7% of Barnwell Industries shares are owned by institutional investors. 17.6% of Barnwell Industries 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.

Summary

Chesapeake Granite Wash Trust beats Barnwell Industries on 9 of the 13 factors compared between the two stocks.

About Barnwell Industries

Barnwell Industries, Inc. acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. It also acquires and develops crude oil and natural gas assets in the province of Alberta, as well as invests in land interests in Hawaii. In addition, the company owns and operates threes water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; and drills water and water monitoring wells of varying depths. Further, it installs and repairs water pumping systems; and distributes trillium flow technologies. Barnwell Industries, Inc. was incorporated in 1956 and is based in Honolulu, Hawaii.

About Chesapeake Granite Wash Trust

Chesapeake Granite Wash Trust owns royalty interests in oil, natural gas liquids, and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. It has royalty interests in 69 producing wells and 118 development wells, and in approximately 26,400 net acres of area. The company was incorporated in 2011 and is based in Houston, Texas.