Black Stone Minerals (NYSE:BSM – Get Rating) and Chesapeake Energy (NASDAQ:CHK – Get Rating) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.
Profitability
This table compares Black Stone Minerals and Chesapeake Energy's net margins, return on equity and return on assets.
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| Net Margins | Return on Equity | Return on Assets |
| Black Stone Minerals | 69.77% | 45.85% | 27.65% |
| Chesapeake Energy | 26.07% | 37.97% | 16.85% |
Earnings & Valuation
This table compares Black Stone Minerals and Chesapeake Energy's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
| Black Stone Minerals | $359.26 million | 9.61 | $181.99 million | $1.88 | 8.77 |
| Chesapeake Energy | $5.81 billion | 2.03 | $6.33 billion | $19.20 | 4.58 |
Chesapeake Energy has higher revenue and earnings than Black Stone Minerals. Chesapeake Energy is trading at a lower price-to-earnings ratio than Black Stone Minerals, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
16.5% of Black Stone Minerals shares are held by institutional investors. 21.1% of Black Stone Minerals shares are held by insiders. Comparatively, 0.0% of Chesapeake Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk & Volatility
Black Stone Minerals has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Chesapeake Energy has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.
Dividends
Black Stone Minerals pays an annual dividend of $1.80 per share and has a dividend yield of 10.9%. Chesapeake Energy pays an annual dividend of $2.20 per share and has a dividend yield of 2.5%. Black Stone Minerals pays out 95.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Energy pays out 11.5% of its earnings in the form of a dividend. Black Stone Minerals has increased its dividend for 2 consecutive years and Chesapeake Energy has increased its dividend for 1 consecutive years. Black Stone Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of recent recommendations for Black Stone Minerals and Chesapeake Energy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
| Black Stone Minerals | 0 | 1 | 2 | 1 | 3.00 |
| Chesapeake Energy | 0 | 1 | 9 | 0 | 2.90 |
Black Stone Minerals presently has a consensus target price of $19.75, indicating a potential upside of 19.84%. Chesapeake Energy has a consensus target price of $124.30, indicating a potential upside of 41.48%. Given Chesapeake Energy's higher possible upside, analysts plainly believe Chesapeake Energy is more favorable than Black Stone Minerals.
Summary
Black Stone Minerals beats Chesapeake Energy on 12 of the 18 factors compared between the two stocks.
About Black Stone Minerals
(Get Rating)
Black Stone Minerals, L.P., together with its subsidiaries, owns and manages oil and natural gas mineral interests. It owns mineral interests in approximately 16.8 million gross acres, nonparticipating royalty interests in 1.8 million gross acres, and overriding royalty interests in 1.7 million gross acres located in 41 states in the United States. As of December 31, 2021, the company had a total estimated proved oil and natural gas reserves of 59,824 barrels of oil equivalent. Black Stone Minerals, L.P. was founded in 1876 and is based in Houston, Texas.
About Chesapeake Energy
(Get Rating)
Chesapeake Energy Corporation, an independent exploration and production company, engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs in the United States. The company holds interests in natural gas resource plays in the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana; and the liquids-rich resource play in the Eagle Ford Shale in South Texas. As of December 31, 2021, it owned interests in approximately 8,200 gross productive wells, including 6,500 wells with working interest and 1,700 wells with an overriding or royalty interest; and had estimated proved reserves of 661 million barrels of oil equivalent. The company was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.
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