Reviewing SandRidge Permian Trust (PER) and Devon Energy (DVN)
SandRidge Permian Trust (NYSE: PER) and Devon Energy (NYSE:DVN) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.
Risk & Volatility
SandRidge Permian Trust has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Devon Energy has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500.
This table compares SandRidge Permian Trust and Devon Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SandRidge Permian Trust||88.09%||19.59%||19.59%|
This is a breakdown of recent ratings and price targets for SandRidge Permian Trust and Devon Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SandRidge Permian Trust||0||0||0||0||N/A|
Devon Energy has a consensus price target of $46.35, suggesting a potential upside of 21.89%. Given Devon Energy’s higher probable upside, analysts plainly believe Devon Energy is more favorable than SandRidge Permian Trust.
Earnings and Valuation
This table compares SandRidge Permian Trust and Devon Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|SandRidge Permian Trust||$29.87 million||4.75||$25.64 million||$0.50||5.40|
|Devon Energy||$12.20 billion||1.64||-$3.30 billion||$2.93||12.98|
SandRidge Permian Trust has higher revenue, but lower earnings than Devon Energy. SandRidge Permian Trust is trading at a lower price-to-earnings ratio than Devon Energy, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
4.2% of SandRidge Permian Trust shares are held by institutional investors. Comparatively, 77.1% of Devon Energy shares are held by institutional investors. 29.0% of SandRidge Permian Trust shares are held by insiders. Comparatively, 0.5% of Devon Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
SandRidge Permian Trust pays an annual dividend of $0.38 per share and has a dividend yield of 14.1%. Devon Energy pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. SandRidge Permian Trust pays out 76.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Devon Energy pays out 8.2% of its earnings in the form of a dividend.
Devon Energy beats SandRidge Permian Trust on 8 of the 15 factors compared between the two stocks.
About SandRidge Permian Trust
Sandridge Permian Trust (the Trust) is a statutory trust. The Trust holds Royalty Interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas. The Trust’s business activities are generally limited to owning the Royalty Interests, and entering into hedging arrangements at the inception of the Trust and activities related thereto, including activities required or permitted by the terms of the conveyances related to the Royalty Interests. The Trust’s properties consist of Royalty Interests in the initial wells and over 860 additional wells that are drilled and perforated for completion. The Royalty Interests are in properties located in the greater Fuhrman-Mascho field, a field in Andrews County, Texas that produces oil primarily from the Grayburg/San Andres formation in the Permian Basin. The Permian Basin extends throughout southwestern Texas and southeastern New Mexico over an area approximately 250 miles wide and over 300 miles long.
About Devon Energy
Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company’s segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in various North American onshore areas in the United States and Canada. The Company’s U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company’s properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.
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