Financial Review: Whiting USA Trust II (OTCMKTS:WHZT) versus Continental Resources (OTCMKTS:CLR)

Whiting USA Trust II (OTCMKTS:WHZT) and Continental Resources (NYSE:CLR) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Profitability

This table compares Whiting USA Trust II and Continental Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Whiting USA Trust II 15.05% 99.29% 96.78%
Continental Resources 9.18% 8.60% 3.77%

Insider and Institutional Ownership

21.1% of Continental Resources shares are owned by institutional investors. 79.6% of Continental Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Whiting USA Trust II has a beta of 2.64, suggesting that its stock price is 164% more volatile than the S&P 500. Comparatively, Continental Resources has a beta of 3.43, suggesting that its stock price is 243% more volatile than the S&P 500.

Valuation & Earnings

This table compares Whiting USA Trust II and Continental Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Whiting USA Trust II $46.97 million 0.05 $8.30 million N/A N/A
Continental Resources $4.63 billion 1.38 $775.64 million $2.25 7.79

Continental Resources has higher revenue and earnings than Whiting USA Trust II.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Whiting USA Trust II and Continental Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Whiting USA Trust II 0 0 0 0 N/A
Continental Resources 6 15 6 0 2.00

Continental Resources has a consensus target price of $21.04, suggesting a potential upside of 20.03%. Given Continental Resources’ higher possible upside, analysts clearly believe Continental Resources is more favorable than Whiting USA Trust II.

Summary

Continental Resources beats Whiting USA Trust II on 9 of the 12 factors compared between the two stocks.

Whiting USA Trust II Company Profile

Whiting USA Trust II holds a term net profits interest in the oil and gas producing properties located in the Permian Basin, Rocky Mountains, Gulf Coast, and Mid-Continent regions. As of December 31, 2018, its oil and gas properties included interests in approximately 367.8 net producing oil and natural gas wells located in 46 predominately mature fields with established production profiles in 10 states. The company was founded in 2011 and is based in Houston, Texas. Whiting USA Trust II is a subsidiary of Whiting Petroleum Corporation.

Continental Resources Company Profile

Continental Resources, Inc. explores for, develops, and produces crude oil and natural gas properties primarily in the north, south, and east regions of the United States. The company sells its crude oil and natural gas production to energy marketing companies, crude oil refining companies, and natural gas gathering and processing companies. As of December 31, 2018, its proved reserves were 1,522 million barrels of crude oil equivalent (MMBoe) with estimated proved developed reserves of 675 MMBoe. Continental Resources, Inc. was founded in 1967 and is based in Oklahoma City, Oklahoma.

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