Reviewing Epsilon Energy (NASDAQ:EPSN) & Natural Resource Partners (NYSE:NRP)

Epsilon Energy (NASDAQ:EPSN) and Natural Resource Partners (NYSE:NRP) are both small-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent recommendations for Epsilon Energy and Natural Resource Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	1	0	0	2.00
Natural Resource Partners	0	1	0	0	2.00

Dividends

Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 3.9%. Natural Resource Partners pays an annual dividend of $3.00 per share and has a dividend yield of 2.7%. Epsilon Energy pays out -119.0% of its earnings in the form of a dividend. Natural Resource Partners pays out 38.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Epsilon Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

60.3% of Epsilon Energy shares are held by institutional investors. Comparatively, 31.8% of Natural Resource Partners shares are held by institutional investors. 28.4% of Epsilon Energy shares are held by company insiders. Comparatively, 35.3% of Natural Resource Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Epsilon Energy has a beta of -0.19, suggesting that its stock price is 119% less volatile than the S&P 500. Comparatively, Natural Resource Partners has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Valuation & Earnings

This table compares Epsilon Energy and Natural Resource Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$51.59 million	3.72	-$5.80 million	($0.21)	-30.19
Natural Resource Partners	$207.28 million	7.13	$136.37 million	$7.84	14.22

Natural Resource Partners has higher revenue and earnings than Epsilon Energy. Epsilon Energy is trading at a lower price-to-earnings ratio than Natural Resource Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Epsilon Energy and Natural Resource Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	-3.77%	5.56%	3.26%
Natural Resource Partners	57.13%	16.65%	13.88%

Summary

Natural Resource Partners beats Epsilon Energy on 10 of the 13 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.

About Natural Resource Partners

Natural Resource Partners L.P., together with its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States. It operates in two segments, Mineral Rights and Soda Ash. The company owns interests in coal, soda ash, trona, and other natural resources. Its coal reserves are primarily located in the Appalachia Basin, the Illinois Basin, and the Northern Powder River Basin in the United States; industrial minerals and aggregates properties located in the United States; and oil and gas properties located in Louisiana. The company leases a portion of its reserves in exchange for royalty payments; and owns and leases transportation and processing infrastructure related to coal properties. NRP (GP) LP serves as the general partner of the company. Natural Resource Partners L.P. was incorporated in 2002 and is headquartered in Houston, Texas.