Comparing SandRidge Mississippian Trust I (SDT) and Laredo Petroleum (LPI)

SandRidge Mississippian Trust I (NYSE: SDT) and Laredo Petroleum (NYSE:LPI) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Volatility & 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.

Profitability

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%
Laredo Petroleum 15.92% 43.77% 6.35%

Institutional and Insider 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

SandRidge Mississippian Trust I pays an annual dividend of $0.18 per share and has a dividend yield of 18.8%. Laredo Petroleum does not pay a dividend. SandRidge Mississippian Trust I pays out 81.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares SandRidge Mississippian Trust I and Laredo Petroleum’s 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 1.48 $15.26 million $0.22 4.36
Laredo Petroleum $597.38 million 4.49 -$260.73 million $0.50 22.14

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.

Analyst Ratings

This is a summary of current ratings and target prices for SandRidge Mississippian Trust I and Laredo Petroleum, as reported 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 2 8 8 0 2.33

Laredo Petroleum has a consensus price target of $13.89, suggesting a potential upside of 25.50%. Given Laredo Petroleum’s higher possible upside, analysts plainly believe Laredo Petroleum is more favorable than SandRidge Mississippian Trust I.

Summary

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.

Receive News & Ratings for SandRidge Mississippian Trust I Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for SandRidge Mississippian Trust I and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply