Peabody Energy (NYSE:BTU – Get Free Report) and Cheniere Energy (NYSE:LNG – Get Free Report) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.
Profitability
This table compares Peabody Energy and Cheniere Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Peabody Energy | -4.56% | -5.22% | -3.22% |
| Cheniere Energy | 13.57% | 29.80% | 7.05% |
Analyst Ratings
This is a summary of current recommendations and price targets for Peabody Energy and Cheniere Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Peabody Energy | 1 | 3 | 2 | 0 | 2.17 |
| Cheniere Energy | 0 | 3 | 15 | 2 | 2.95 |
Insider and Institutional Ownership
87.4% of Peabody Energy shares are held by institutional investors. Comparatively, 87.3% of Cheniere Energy shares are held by institutional investors. 0.5% of Peabody Energy shares are held by company insiders. Comparatively, 0.6% of Cheniere Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk & Volatility
Peabody Energy has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.
Earnings and Valuation
This table compares Peabody Energy and Cheniere Energy”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Peabody Energy | $3.86 billion | 0.80 | -$52.90 million | ($1.50) | -16.93 |
| Cheniere Energy | $19.98 billion | 2.85 | $5.33 billion | $13.43 | 20.51 |
Cheniere Energy has higher revenue and earnings than Peabody Energy. Peabody Energy is trading at a lower price-to-earnings ratio than Cheniere Energy, indicating that it is currently the more affordable of the two stocks.
Dividends
Peabody Energy pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Cheniere Energy pays an annual dividend of $2.22 per share and has a dividend yield of 0.8%. Peabody Energy pays out -20.0% of its earnings in the form of a dividend. Cheniere Energy pays out 16.5% 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. Peabody Energy has raised its dividend for 1 consecutive years. Peabody Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Cheniere Energy beats Peabody Energy on 12 of the 18 factors compared between the two stocks.
About Peabody Energy
Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.
About Cheniere Energy
Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.
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