Both the shares of Apache Corporation (NYSE:$APA) and Anadarko Petroleum (NYSE:$APC) are just a little under $47 per share. Both companies saw a major decline in their share prices compared to early this year, when Apache’s price per share was sitting above $60 and Anadarko’s price per share was more than $70.

There is still hope for those in energy investments that these two companies’ stock prices will rise again — the question lies in which of the two companies have a better chance in rising rather than continuing the downward trend.

Performance — How are they Faring?

An important point that many investors consider when choosing which stocks to invest in is the company’s quarterly reports. According to the first-quarter 2017 earnings report that both companies released in early May, Apache and Anadarko both performed better than they had compared to last year. However, for many, the improvements was not a surprise as oil prices has increased quite a lot — ConocoPhillips (NYSE:$COP), for example, experienced an improvement of a billion dollars year-over-year in earnings. Although Apache, Anadarko, and ConocoPhillips have all released overall positive earning reports, all three companies’ stock prices have gone down.

Anadarko’s first-quarter 2017 earnings report showed an great improvement in sales volume, going up about a divestiture-adjusted 20% year over year. The company also upped its liquids production to 61% compared to the 53% in the year-ago quarter. As such, the company’s overall margins were improved because liquids usually sell at a higher price. Despite an increase in sales volume and liquids production, the company posted an adjusted $330 million loss instead of profiting. No doubt its loss instead of profit had a big part in driving the company’s shares down.

Apache’s first-quarter 2017 earnings report showed a small profit despite having lower sales volume compared to the year-ago quarter. While revenue and cash flow both went up in comparison to last year’s reports, the market and its investors had anticipated a better performance, prompting shares to spiral down after the company announced the report.

While both companies have benefitted from the oil market improving, there is still a ways to go when it comes to gaining significant profits. But a profit, however small, is still a profit and is better than a loss — thus, when it comes to performance based on the first-quarter 2017 earnings reports, Apache comes out on top.

Dividends — What Do they Look Like?

For investors, a dividend means good news — particularly in a time like now in the oil industry, where stocks across the board has been falling with no sure sign of recovery in the near future. A dividend means regular payouts for investors. This can be rather helpful as investors will be more inclined to wait for share prices to recover.

Both Anadarko and Apache pay a dividend to their investors; however Apache’s dividend is a bit higher. While both companies increased their dividend payouts back in 2014 — Anadarko increased to $0.27 per share and Apache increased to $0.25 per share — the oil industry began to tank shortly thereafter. After holding its dividend level for the next two years after upping it, Anadarko eventually had to cut its dividend to $0.05 per share. Apache, on the other hand, has been quite steady in keeping its dividend at $0.25 per share, and the company doesn’t seem like it will either be lowering or raising it in the near future.

Apache’s steady hold on its dividend level has allowed the company’s current yield to be at 2.1%, a figure that is rather attractive to many investors given the falls the oil industry has experienced. Apache’s yield is rather close to competitor ConocoPhillips’ 2.4% yield.

While major companies such as ExxonMobil has a far higher yield and a better record of increasing dividend levels, when it comes down to Apache and Anadarko, Apache’s yield is definitely a winner with 2.1% compared to Anadarko’s 0.4% yield.

Overall Outlook

While past earnings and dividend yield is quite important to consider when looking at stocks, the most important aspect to look into is the company’s future prospects and performance. Both Apache and Anadarko are currently undergoing several changes that could result in quite an impact.

The changes that Anadarko will be seeing is unfortunately caused by an explosion that killed two people at a home in Colorado. The explosion occurred April of this year, and an investigation took place. It was then discovered that there was an improperly capped abandoned return flow-line that was connected to a well owned by Anadarko. Gas from the flow-line had leaked into the home, which caused the explosion.

The incident prompted Anadarko to inspect all its wells that are located within 1,000 feet of buildings. The company finished its inspections early June and had submitted its reports to Colorado. As such, it is currently unclear if Anadarko has to take further actions regarding the situation or if the reports submitted will prompt more problems. Additionally, Anadarko also has to deal with the legal ramifications of the explosion.

Anadarko’s changes were not prompted by the company itself, but Apache’s changes were prompted by the company itself: developing its infrastructure at Alpine High. However, because the area surrounding Alpine High has been largely ignored by the oil industry up until recently, Apache is basically starting its infrastructures from scratch. While the endeavour is ahead of schedule, the project’s budget has not been met. Apache expects a tentative production date of late 2017, but realistically steady production won’t be able to really happen until 2018. That being said, Apache is still hard at work on the infrastructure at the site. Other than its Alpine High operation, the company has a couple of scheduled maintenances at its North Sea operations.

The future of both companies are still rather vague and uncertain, especially with the recent drops in oil prices. However, Anadarko’s incident seems to put the company to be a more high-risk energy investment as the change that occurred was not prompted by the company itself. Apache’s position — waiting for infrastructure to be completed at a huge oil and gas find — seems like it’s a lower-risk energy investment compared to Anadarko.

And the winner is …

While Apache may not have performed as well as most investors had hoped, the company does pay a rather nice dividend and high potential for growth once Alpine High begins production. When it comes to choosing Apache and Anadarko — different stocks but at the same share price — most investors will definitely be betting on Apache.
Things could still look up for Anadarko, however, if the April incident at Colorado can be resolved quickly and the company starts profiting from recent productions. As such, Apache is the clear winner between the two today.

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