Analyzing Kinetik (NYSE:KNTK) & Baytex Energy (NYSE:BTE)

Baytex Energy (NYSE:BTE) and Kinetik (NYSE:KNTK) are both mid-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Earnings and Valuation

This table compares Baytex Energy and Kinetik”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baytex Energy	$2.56 billion	1.30	-$432.12 million	($0.67)	-7.19
Kinetik	$1.76 billion	4.92	$525.93 million	$2.76	19.36

Kinetik has lower revenue, but higher earnings than Baytex Energy. Baytex Energy is trading at a lower price-to-earnings ratio than Kinetik, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

46.1% of Baytex Energy shares are held by institutional investors. Comparatively, 21.1% of Kinetik shares are held by institutional investors. 0.8% of Baytex Energy shares are held by company insiders. Comparatively, 3.6% of Kinetik shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Baytex Energy has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Kinetik has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares Baytex Energy and Kinetik’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baytex Energy	-26.43%	-7.77%	-4.86%
Kinetik	26.19%	-38.96%	7.07%

Dividends

Baytex Energy pays an annual dividend of $0.06 per share and has a dividend yield of 1.2%. Kinetik pays an annual dividend of $3.24 per share and has a dividend yield of 6.1%. Baytex Energy pays out -9.0% of its earnings in the form of a dividend. Kinetik pays out 117.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinetik has raised its dividend for 1 consecutive years. Kinetik is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Baytex Energy and Kinetik, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baytex Energy	0	6	2	3	2.73
Kinetik	0	6	11	2	2.79

Kinetik has a consensus price target of $54.00, indicating a potential upside of 1.09%. Given Kinetik’s stronger consensus rating and higher possible upside, analysts plainly believe Kinetik is more favorable than Baytex Energy.

Summary

Kinetik beats Baytex Energy on 13 of the 18 factors compared between the two stocks.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.

About Kinetik

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.