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

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

Profitability

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

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

Insider and Institutional Ownership

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

Dividends

Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 6.8%. Canadian Natural Resources pays an annual dividend of $1.56 per share and has a dividend yield of 4.6%. 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. Canadian Natural Resources pays out 60.6% of its earnings in the form of a dividend.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Ridge Resources	$394.07 million	2.15	$81.10 million	$0.36	18.03
Canadian Natural Resources	$30.25 billion	2.35	$6.10 billion	$2.57	13.08

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.

Volatility and Risk

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Granite Ridge Resources and Canadian Natural Resources, as provided by MarketBeat.

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

Granite Ridge Resources presently has a consensus target price of $7.60, suggesting a potential upside of 17.10%. Canadian Natural Resources has a consensus target price of $51.00, suggesting a potential upside of 51.47%. Given Canadian Natural Resources’ higher probable upside, analysts plainly believe Canadian Natural Resources is more favorable than Granite Ridge Resources.

Summary

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

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.

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.