Analyzing California Resources (NYSE:CRC) and Northern Oil and Gas (NYSE:NOG)

Northern Oil and Gas (NYSE:NOG) and California Resources (NYSE:CRC) are both mid-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Dividends

Northern Oil and Gas pays an annual dividend of $1.80 per share and has a dividend yield of 6.6%. California Resources pays an annual dividend of $1.55 per share and has a dividend yield of 3.0%. Northern Oil and Gas pays out 28.0% 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. Northern Oil and Gas has raised its dividend for 4 consecutive years and California Resources has raised its dividend for 1 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Northern Oil and Gas and California Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northern Oil and Gas	26.64%	23.46%	10.14%
California Resources	13.70%	11.45%	5.64%

Institutional and Insider Ownership

98.8% of Northern Oil and Gas shares are held by institutional investors. Comparatively, 97.8% of California Resources shares are held by institutional investors. 2.9% of Northern Oil and Gas shares are held by insiders. Comparatively, 0.0% of California Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Northern Oil and Gas has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, California Resources has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Northern Oil and Gas and California Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Oil and Gas	0	5	4	1	2.60
California Resources	0	1	10	2	3.08

Northern Oil and Gas presently has a consensus target price of $38.78, suggesting a potential upside of 42.36%. California Resources has a consensus target price of $62.27, suggesting a potential upside of 21.37%. Given Northern Oil and Gas’ higher possible upside, equities analysts plainly believe Northern Oil and Gas is more favorable than California Resources.

Earnings & Valuation

This table compares Northern Oil and Gas and California Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Oil and Gas	$2.23 billion	1.21	$520.31 million	$6.42	4.24
California Resources	$3.20 billion	1.43	$376.00 million	$5.51	9.31

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

Summary

Northern Oil and Gas beats California Resources on 12 of the 18 factors compared between the two stocks.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.

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.