ARC Resources (OTCMKTS:AETUF) & Midstates Petroleum (OTCMKTS:MPO) Critical Review

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ARC Resources (OTCMKTS:AETUF) and Midstates Petroleum (NYSE:MPO) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for ARC Resources and Midstates Petroleum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARC Resources 0 1 3 0 2.75
Midstates Petroleum 0 0 0 0 N/A

Dividends

ARC Resources pays an annual dividend of $0.44 per share and has a dividend yield of 9.4%. Midstates Petroleum does not pay a dividend.

Institutional & Insider Ownership

95.4% of Midstates Petroleum shares are owned by institutional investors. 1.8% of Midstates Petroleum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares ARC Resources and Midstates Petroleum’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARC Resources $1.16 billion 1.43 $164.94 million N/A N/A
Midstates Petroleum $208.64 million 0.46 $49.78 million N/A N/A

ARC Resources has higher revenue and earnings than Midstates Petroleum.

Risk & Volatility

ARC Resources has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Midstates Petroleum has a beta of 2.14, suggesting that its stock price is 114% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
ARC Resources 0.78% 0.35% 0.21%
Midstates Petroleum 14.67% 9.99% 8.41%

About ARC Resources

ARC Resources Ltd., together with its subsidiaries, acquires, develops, and holds interest in petroleum and natural gas properties and assets in Canada. The company holds interests in the Montney properties located in northeast British Columbia and northern Alberta; and Cardium properties in the Pembina area of Alberta. ARC Resources Ltd. was founded in 1996 and is headquartered in Calgary, Canada.

About Midstates Petroleum

Midstates Petroleum Company, Inc. engages in the exploration, development, and production of oil, natural gas liquids, and natural gas in the United States. The company's operations are primarily focused on exploration and production activities in the Mississippian Lime. As of December 31, 2018, its assets consisted of approximately 102,198 net acres in the Mississippian Lime trend in Woods and Alfalfa counties of Oklahoma. The company was founded in 1993 and is headquartered in Tulsa, Oklahoma.

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