W&T Offshore (NYSE:WTI – Get Free Report) and ARC Resources (OTCMKTS:AETUF – Get Free Report) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.
Dividends
W&T Offshore pays an annual dividend of $0.40 per share and has a dividend yield of 9.1%. ARC Resources pays an annual dividend of $0.50 per share and has a dividend yield of 3.2%. W&T Offshore pays out 47.1% of its earnings in the form of a dividend. ARC Resources pays out 17.2% 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.
Risk and Volatility
W&T Offshore has a beta of 1.97, indicating that its share price is 97% more volatile than the S&P 500. Comparatively, ARC Resources has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.
Insider & Institutional Ownership
39.7% of W&T Offshore shares are owned by institutional investors. 33.5% of W&T Offshore shares are owned by company insiders. Comparatively, 0.3% of ARC Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares W&T Offshore and ARC Resources’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| W&T Offshore | 17.37% | 1,591.08% | 3.79% |
| ARC Resources | 34.54% | 36.74% | 21.05% |
Analyst Recommendations
This is a summary of current ratings and target prices for W&T Offshore and ARC Resources, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| W&T Offshore | 0 | 0 | 1 | 0 | 3.00 |
| ARC Resources | 0 | 1 | 3 | 0 | 2.75 |
W&T Offshore presently has a consensus price target of $8.30, suggesting a potential upside of 89.07%. ARC Resources has a consensus price target of $21.75, suggesting a potential upside of 39.60%. Given W&T Offshore’s stronger consensus rating and higher probable upside, equities research analysts plainly believe W&T Offshore is more favorable than ARC Resources.
Valuation and Earnings
This table compares W&T Offshore and ARC Resources’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| W&T Offshore | $714.09 million | 0.90 | $231.15 million | $0.85 | 5.16 |
| ARC Resources | $6.65 billion | 1.43 | $1.77 billion | $2.91 | 5.35 |
ARC Resources has higher revenue and earnings than W&T Offshore. W&T Offshore is trading at a lower price-to-earnings ratio than ARC Resources, indicating that it is currently the more affordable of the two stocks.
Summary
ARC Resources beats W&T Offshore on 9 of the 16 factors compared between the two stocks.
About W&T Offshore
W&T Offshore, Inc., an independent oil and natural gas producer, engages in the acquisition, exploration, and development of oil and natural gas properties in the Gulf of Mexico. The company sells crude oil, natural gas liquids, and natural gas. W&T Offshore, Inc. was founded in 1983 and is headquartered in Houston, Texas.
About ARC Resources
ARC Resources Ltd. explores, develops, and produces crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney properties located in northeast British Columbia and northern Alberta. ARC Resources Ltd. was founded in 1996 and is headquartered in Calgary, Canada.
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