California Resources (NYSE:CRC) and Antero Midstream (NYSE:AM) Financial Analysis

Antero Midstream (NYSE:AM) and California Resources (NYSE:CRC) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Valuation & Earnings

This table compares Antero Midstream and California Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Antero Midstream	$1.19 billion	8.42	$413.16 million	$0.84	25.10
California Resources	$3.67 billion	1.28	$363.00 million	($1.36)	-38.93

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Antero Midstream and California Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Antero Midstream	0	5	2	0	2.29
California Resources	0	3	9	1	2.85

Antero Midstream presently has a consensus target price of $24.20, indicating a potential upside of 14.80%. California Resources has a consensus target price of $75.00, indicating a potential upside of 41.67%. Given California Resources’ stronger consensus rating and higher probable upside, analysts plainly believe California Resources is more favorable than Antero Midstream.

Risk & Volatility

Antero Midstream has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, California Resources has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Antero Midstream	32.41%	20.19%	6.56%
California Resources	-3.79%	9.82%	4.65%

Institutional & Insider Ownership

54.0% of Antero Midstream shares are held by institutional investors. Comparatively, 97.8% of California Resources shares are held by institutional investors. 1.1% of Antero Midstream shares are held by company insiders. Comparatively, 0.5% of California Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Antero Midstream pays an annual dividend of $0.90 per share and has a dividend yield of 4.3%. California Resources pays an annual dividend of $1.62 per share and has a dividend yield of 3.1%. Antero Midstream pays out 107.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. California Resources pays out -119.1% of its earnings in the form of a dividend. California Resources has raised its dividend for 1 consecutive years.

About Antero Midstream

Antero Midstream Corporation owns, operates, and develops midstream energy assets in the Appalachian Basin. It operates in two segments, Gathering and Processing, and Water Handling. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources' wells in West Virginia and Ohio. The Water Handling segment delivers fresh water from sources, including the Ohio River, local reservoirs, and various regional waterways; uses water handling systems to transport flowback and produced water; and offers pumping stations, water storage, and blending facilities. The company was founded in 2002 and is headquartered in Denver, Colorado.

About California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.