Critical Contrast: Canadian Natural Resources (NYSE:CNQ) & Granite Ridge Resources (NYSE:GRNT)

Canadian Natural Resources (NYSE:CNQ) and Granite Ridge Resources (NYSE:GRNT) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Institutional & Insider Ownership

74.0% of Canadian Natural Resources shares are held by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are held by institutional investors. 5.0% of Canadian Natural Resources shares are held by insiders. Comparatively, 1.9% of Granite Ridge Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Canadian Natural Resources and Granite Ridge Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	4	0	0	2.00
Granite Ridge Resources	0	2	1	1	2.75

Canadian Natural Resources presently has a consensus price target of $51.00, indicating a potential upside of 54.08%. Granite Ridge Resources has a consensus price target of $7.60, indicating a potential upside of 18.75%. Given Canadian Natural Resources’ higher possible upside, equities analysts plainly believe Canadian Natural Resources is more favorable than Granite Ridge Resources.

Profitability

This table compares Canadian Natural Resources and Granite Ridge Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	18.45%	20.07%	10.51%
Granite Ridge Resources	12.59%	11.58%	7.89%

Volatility and Risk

Canadian Natural Resources has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, Granite Ridge Resources has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Dividends

Canadian Natural Resources pays an annual dividend of $1.56 per share and has a dividend yield of 4.7%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 6.9%. Canadian Natural Resources pays out 60.6% of its earnings in the form of a dividend. Granite Ridge Resources pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Canadian Natural Resources and Granite Ridge Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$30.25 billion	2.31	$6.10 billion	$2.57	12.85
Granite Ridge Resources	$394.07 million	2.12	$81.10 million	$0.36	17.78

Canadian Natural Resources has higher revenue and earnings than Granite Ridge Resources. Canadian Natural Resources is trading at a lower price-to-earnings ratio than Granite Ridge Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Canadian Natural Resources beats Granite Ridge Resources on 12 of the 17 factors compared between the two stocks.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.