Critical Review: Barnwell Industries (NYSE:BRN) and California Resources (NYSE:CRC)

Barnwell Industries (NYSE:BRN) and California Resources (NYSE:CRC) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

Barnwell Industries has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500. Comparatively, California Resources has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares Barnwell Industries and California Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barnwell Industries	-13.29%	-18.20%	-9.39%
California Resources	11.34%	11.00%	5.91%

Dividends

Barnwell Industries pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. California Resources pays an annual dividend of $1.24 per share and has a dividend yield of 2.4%. Barnwell Industries pays out -3.0% of its earnings in the form of a dividend. California Resources pays out 35.5% 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.

Institutional and Insider Ownership

40.7% of Barnwell Industries shares are owned by institutional investors. Comparatively, 97.8% of California Resources shares are owned by institutional investors. 17.6% of Barnwell Industries shares are owned by company insiders. Comparatively, 0.6% of California Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Barnwell Industries and California Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barnwell Industries	0	0	0	0	N/A
California Resources	0	2	5	0	2.71

California Resources has a consensus target price of $63.00, suggesting a potential upside of 19.91%. Given California Resources’ higher probable upside, analysts plainly believe California Resources is more favorable than Barnwell Industries.

Earnings and Valuation

This table compares Barnwell Industries and California Resources’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barnwell Industries	$25.27 million	0.92	-$960,000.00	($0.33)	-7.00
California Resources	$2.80 billion	1.29	$564.00 million	$3.49	15.05

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

Summary

California Resources beats Barnwell Industries on 13 of the 15 factors compared between the two stocks.

About Barnwell Industries

Barnwell Industries, Inc. acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. It also acquires and develops crude oil and natural gas assets in the province of Alberta, as well as invests in land interests in Hawaii. In addition, the company owns and operates threes water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; and drills water and water monitoring wells of varying depths. Further, it installs and repairs water pumping systems; and distributes trillium flow technologies. Barnwell Industries, Inc. was incorporated in 1956 and is based in Honolulu, Hawaii.

About California Resources

California Resources Corporation operates as an independent oil and natural gas exploration and production, and carbon management company in the United States. The company explores, produces, and markets crude oil, natural gas, and natural gas liquids for marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It also engages in the generation and sale of electricity to the wholesale power market and utility sector; and developing various carbon capture and storage projects in California. The company was incorporated in 2014 and is based in Long Beach, California.