Financial Analysis: Pengrowth Energy (OTCMKTS:PGHEF) versus ARC Resources (OTCMKTS:AETUF)

ARC Resources (OTCMKTS:AETUF) and Pengrowth Energy (OTCMKTS:PGHEF) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Risk and Volatility

ARC Resources has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Pengrowth Energy has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500.

Earnings and Valuation

This table compares ARC Resources and Pengrowth Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARC Resources	$4.19 billion	2.53	$1.18 billion	$1.54	11.61
Pengrowth Energy	$408.45 million	0.06	-$431.50 million	N/A	N/A

ARC Resources has higher revenue and earnings than Pengrowth Energy.

Insider and Institutional Ownership

2.5% of ARC Resources shares are owned by institutional investors. Comparatively, 0.5% of Pengrowth Energy shares are owned by institutional investors. 0.3% of ARC Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for ARC Resources and Pengrowth Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARC Resources	0	0	1	2	3.67
Pengrowth Energy	0	0	0	0	0.00

ARC Resources presently has a consensus target price of $25.00, suggesting a potential upside of 39.82%. Given ARC Resources’ stronger consensus rating and higher probable upside, research analysts clearly believe ARC Resources is more favorable than Pengrowth Energy.

Profitability

This table compares ARC Resources and Pengrowth Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARC Resources	26.33%	16.60%	10.02%
Pengrowth Energy	-147.21%	-193.94%	-25.06%

Summary

ARC Resources beats Pengrowth Energy on 12 of the 13 factors compared between the two stocks.

About ARC Resources

ARC Resources Ltd. engages in the acquiring and developing crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney basin located in Alberta and northeast British Columbia. ARC Resources Ltd. was founded in 1996 and is based in Calgary, Canada.

About Pengrowth Energy

Pengrowth Energy Corporation, a resource company, explores for, develops, and produces oil and natural gas assets in Alberta, British Columbia, Saskatchewan, and Nova Scotia provinces in Canada. The company explores for crude oil, bitumen, natural gas, shale gas, and natural gas liquids. Its principal producing properties are the Lindbergh thermal property covering an area of 20,800 net acres located in Alberta; and Groundbirch property totaling an area of 12,536 net acres located to the south west of Fort St. John, British Columbia. As of December 31, 2018, the company had 269 net producing oil and natural gas wells; and 586 net non-producing wells, as well as total proved plus probable reserves of 446.6 millions of barrels of oil equivalent. Pengrowth Energy Corporation was founded in 1988 and is headquartered in Calgary, Canada.