Canadian Natural Resources (NYSE:CNQ – Get Free Report) and SandRidge Energy (NYSE:SD – Get Free Report) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.
Insider and Institutional Ownership
74.0% of Canadian Natural Resources shares are owned by institutional investors. Comparatively, 61.8% of SandRidge Energy shares are owned by institutional investors. 5.0% of Canadian Natural Resources shares are owned by company insiders. Comparatively, 1.6% of SandRidge Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Canadian Natural Resources and SandRidge Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Canadian Natural Resources | 22.78% | 23.91% | 11.45% |
| SandRidge Energy | 46.06% | 13.62% | 10.93% |
Dividends
Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.3%. SandRidge Energy pays an annual dividend of $0.52 per share and has a dividend yield of 3.5%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. SandRidge Energy pays out 23.2% 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. Canadian Natural Resources has raised its dividend for 24 consecutive years and SandRidge Energy has raised its dividend for 2 consecutive years. SandRidge Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of recent ratings for Canadian Natural Resources and SandRidge Energy, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Canadian Natural Resources | 0 | 4 | 6 | 1 | 2.73 |
| SandRidge Energy | 0 | 3 | 0 | 0 | 2.00 |
Canadian Natural Resources presently has a consensus target price of $57.00, indicating a potential upside of 3.47%. Given Canadian Natural Resources’ stronger consensus rating and higher possible upside, research analysts plainly believe Canadian Natural Resources is more favorable than SandRidge Energy.
Risk and Volatility
Canadian Natural Resources has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, SandRidge Energy has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.
Valuation and Earnings
This table compares Canadian Natural Resources and SandRidge Energy”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Canadian Natural Resources | $51.40 billion | 2.20 | $7.74 billion | $4.05 | 13.60 |
| SandRidge Energy | $156.36 million | 3.50 | $70.20 million | $2.24 | 6.59 |
Canadian Natural Resources has higher revenue and earnings than SandRidge Energy. SandRidge Energy is trading at a lower price-to-earnings ratio than Canadian Natural Resources, indicating that it is currently the more affordable of the two stocks.
Summary
Canadian Natural Resources beats SandRidge Energy on 13 of the 18 factors compared between the two stocks.
About Canadian Natural Resources
Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.
About SandRidge Energy
SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.
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