Should Investors Worry about Continental Resources’ Leverage?



Continental Resources’ leverage

Since 3Q14, Continental Resources’ (CLR) total debt has risen ~20%. In 3Q16, the company’s total debt was $6.8 billion compared to ~$7.1 billion in 3Q15, a decline of ~5%.


CLR’s total-debt-to-equity ratio rose from 120% in 3Q14 to ~160% in 3Q16. A debt-to-equity ratio over 100% means that a company has more debt than equity. The higher the debt-to-equity ratio, the riskier the company.

Meanwhile, CLR’s peers Cimarex Energy (XEC), Concho Resources (CXO), and Hess (HES) have debt-to-equity ratios of ~64.3%, ~38.1%, and 37%, respectively. These companies make up 3.4% of the Energy Select Sector SPDR (XLE).

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