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How Did CHK’s Performance Affect Its Valuation?

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How does CHK compare to peers and broad indexes?

CHK’s stock price has fallen 48.6% on a YTD basis. The recovery in crude prices appears to have been offset by the performance of natural gas. The S&P GSCI Brent Crude TR has YTD returns of 9.5% versus -42.1% from the S&P GSCI Natural Gas TR.

The stock didn’t pay a dividend after April 2015. A forward PE of 4.9x compares to a sector average forward PE of 30.8x and a dividend yield of 1.8%. The S&P 500 (SPX-INDEX) (SPY) offers a dividend yield of 2.2%, a PE ratio of 23.7x, and a YTD return of 19.8%. The Dow Jones Industrial Average (DJIA-INDEX) (DIA) has a dividend yield of 2.2%, a PE ratio of 22.3x, and a YTD return of 25.3%. The NASDAQ Composite (COMP-INDEX) (ONEQ) has a PE ratio of 25.4x and a YTD return of 29.4%.

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What is CHK’s outlook?

The recovery and positive outlook of energy prices, especially crude prices, have contributed to a positive outlook for the company. The company’s revenue has been projected to grow by 17% to $9.2 billion in 2017 followed by a 1% decline to $9.1 billion in 2018. Diluted loss per share is projected to fall 1,620% to a positive $0.76 in 2017 followed by a decline of 3% to $0.74 in 2018.

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has exposure to CHK. It has a PE of 23.7x and a dividend yield of 0.8%. The VanEck Vectors Unconventional Oil & Gas ETF (FRAK) has exposure to CHK. It has a PE of 32.6x and a dividend yield of 0.5%.

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