California Resources (CRC) versus EXCO Resources (XCO) Critical Contrast

California Resources (NYSE: CRC) and EXCO Resources (NYSE:XCO) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
California Resources -10.23% N/A -3.96%
EXCO Resources 25.72% N/A -4.60%

Analyst Recommendations

This is a summary of recent recommendations for California Resources and EXCO Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
California Resources 1 1 2 0 2.25
EXCO Resources 0 0 0 0 N/A

California Resources presently has a consensus price target of $13.33, suggesting a potential downside of 31.41%. Given California Resources’ higher probable upside, equities analysts plainly believe California Resources is more favorable than EXCO Resources.

Volatility & Risk

California Resources has a beta of 6.52, suggesting that its stock price is 552% more volatile than the S&P 500. Comparatively, EXCO Resources has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Earnings and Valuation

This table compares California Resources and EXCO Resources’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
California Resources $1.55 billion 0.54 $279.00 million ($4.85) -4.01
EXCO Resources $271.00 million 0.05 -$225.25 million $3.84 0.17

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

Institutional & Insider Ownership

75.2% of California Resources shares are held by institutional investors. Comparatively, 56.3% of EXCO Resources shares are held by institutional investors. 0.9% of California Resources shares are held by company insiders. Comparatively, 1.4% of EXCO Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

California Resources beats EXCO Resources on 8 of the 12 factors compared between the two stocks.

About California Resources

California Resources Corporation is an independent oil and natural gas exploration and production company, with operating properties within the State of California. The Company produced approximately 140 thousand barrels of oil equivalent per day (MBoe/d), as of December 31, 2016. As of December 31, 2016, the Company had net proved reserves of 568 million barrels of oil equivalent (MMBoe). As of December 31, 2016, it drilled 42 development wells with 37 wells in the San Joaquin basin and five in the Los Angeles basin, which included over 30 steamflood and eight waterflood wells. As of December 31, 2016, the Company produced 36 billion barrels of oil equivalent (BBoe), including approximately 20 BBoe in the San Joaquin basin, 11 BBoe in the Los Angeles basin, three BBoe in the Ventura basin and 10 trillion cubic feet (Tcf) of natural gas in the Sacramento basin. Its operations included 135 fields with 8,837 gross active wellbores, as of December 31, 2016.

About EXCO Resources

EXCO Resources, Inc. (EXCO) is an oil and natural gas company. The Company is engaged in the exploration, exploitation, acquisition, development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The Company’s principal operations are conducted in certain United States oil and natural gas areas, including Texas, Louisiana and the Appalachia region. The Company holds acreage positions in approximately three shale plays in the United States, including East Texas and North Louisiana, South Texas and Appalachia. In East Texas and North Louisiana, the Company holds approximately 83,800 net acres in the Haynesville and Bossier shales. In South Texas, it holds approximately 65,800 net acres in the Eagle Ford shale. In Appalachia, the Company holds approximately 137,400 net acres prospective in the Marcellus shale.

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