Analyzing Baytex Energy (NYSE:BTE) and Alliance Resource Partners (NASDAQ:ARLP)

Alliance Resource Partners (NASDAQ:ARLP) and Baytex Energy (NYSE:BTE) are both mid-cap energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Earnings & Valuation

This table compares Alliance Resource Partners and Baytex Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alliance Resource Partners	$2.19 billion	1.55	$311.16 million	$2.05	12.92
Baytex Energy	$2.56 billion	1.31	-$432.12 million	($0.67)	-7.25

Alliance Resource Partners has higher earnings, but lower revenue than Baytex Energy. Baytex Energy is trading at a lower price-to-earnings ratio than Alliance Resource Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Alliance Resource Partners and Baytex Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alliance Resource Partners	0	1	3	0	2.75
Baytex Energy	1	6	3	1	2.36

Alliance Resource Partners currently has a consensus target price of $30.00, indicating a potential upside of 13.29%. Given Alliance Resource Partners’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Alliance Resource Partners is more favorable than Baytex Energy.

Volatility & Risk

Alliance Resource Partners has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, Baytex Energy has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Insider & Institutional Ownership

18.1% of Alliance Resource Partners shares are held by institutional investors. Comparatively, 46.1% of Baytex Energy shares are held by institutional investors. 16.8% of Alliance Resource Partners shares are held by insiders. Comparatively, 0.8% of Baytex Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Alliance Resource Partners pays an annual dividend of $2.40 per share and has a dividend yield of 9.1%. Baytex Energy pays an annual dividend of $0.07 per share and has a dividend yield of 1.4%. Alliance Resource Partners pays out 117.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Baytex Energy pays out -10.4% of its earnings in the form of a dividend.

Profitability

This table compares Alliance Resource Partners and Baytex Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alliance Resource Partners	12.25%	17.70%	11.12%
Baytex Energy	-26.43%	-7.77%	-4.86%

Summary

Alliance Resource Partners beats Baytex Energy on 11 of the 16 factors compared between the two stocks.

About Alliance Resource Partners

Alliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties. It produces a range of thermal and metallurgical coal with sulfur and heat contents. The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, it owns and leases oil and gas mineral interests and equity interests; and leases its coal mineral reserves and resources to its mining complexes; and leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software. It also exports its products. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.

About Baytex Energy

Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.