SandRidge Mississippian Trust I (SDT) and Laredo Petroleum (LPI) Critical Comparison
SandRidge Mississippian Trust I (NYSE: SDT) and Laredo Petroleum (NYSE:LPI) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.
This is a summary of recent ratings and recommmendations for SandRidge Mississippian Trust I and Laredo Petroleum, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SandRidge Mississippian Trust I||0||0||0||0||N/A|
Laredo Petroleum has a consensus target price of $13.89, suggesting a potential upside of 23.93%. Given Laredo Petroleum’s higher probable upside, analysts clearly believe Laredo Petroleum is more favorable than SandRidge Mississippian Trust I.
SandRidge Mississippian Trust I pays an annual dividend of $0.18 per share and has a dividend yield of 18.4%. Laredo Petroleum does not pay a dividend. SandRidge Mississippian Trust I pays out 78.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares SandRidge Mississippian Trust I and Laredo Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SandRidge Mississippian Trust I||68.23%||20.24%||20.24%|
Valuation and Earnings
This table compares SandRidge Mississippian Trust I and Laredo Petroleum’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SandRidge Mississippian Trust I||$18.14 million||1.51||$15.26 million||$0.23||4.26|
|Laredo Petroleum||$597.38 million||4.55||-$260.73 million||$0.50||22.42|
SandRidge Mississippian Trust I has higher earnings, but lower revenue than Laredo Petroleum. SandRidge Mississippian Trust I is trading at a lower price-to-earnings ratio than Laredo Petroleum, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
1.2% of SandRidge Mississippian Trust I shares are held by institutional investors. 1.4% of Laredo Petroleum shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
SandRidge Mississippian Trust I has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
Laredo Petroleum beats SandRidge Mississippian Trust I on 10 of the 15 factors compared between the two stocks.
SandRidge Mississippian Trust I Company Profile
SandRidge Mississippian Trust I is a statutory trust formed by and among SandRidge Energy, Inc. (SandRidge), The Bank of New York Mellon Trust Company, N.A., and The Corporation Trust Company. Sandridge offers various services to the Company, such as the operation of its development wells; remittance of net proceeds from the sale of associated production to the Company; administrative services, such as accounting, tax preparation, bookkeeping and informational services performed on behalf of the Company, and derivative agreement services related to production. The Company holds Royalty Interests in specified oil and natural gas properties located in the Mississippian formation in Alfalfa, Garfield, Grant and Woods counties in Oklahoma. The Mississippian formation is a carbonate hydrocarbon system located on the Anadarko Shelf. The top of the formation lies stratigraphically between the Pennsylvanian-aged Morrow formation and the Devonian-aged Woodford Shale formation.
Laredo Petroleum Company Profile
Laredo Petroleum, Inc. (Laredo) is an independent energy company. The Company is focused on the acquisition, exploration and development of oil and natural gas properties, and the transportation of oil and natural gas from such properties primarily in the Permian Basin in West Texas. It operates through two segments: Exploration and production of oil and natural gas properties, and Midstream and marketing. The exploration and production of oil and natural gas properties are conducted by it through the exploration and development of its acreage in the Permian Basin. As of December 31, 2016, it had assembled 127,847 net acres in the Permian Basin and had total proved reserves, presented on a three-stream basis, of 167,100 thousand of barrels of oil equivalent (MBOE). The Midstream and marketing segment’s operations are conducted by its subsidiary, Laredo Midstream Services, LLC, which buys, sells, gathers and transports oil, natural gas and water primarily for the account of Laredo.
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