Permian Basin Royalty Trust (NYSE:PBT) versus Sunoco (NYSE:SUN) Financial Contrast

Sunoco (NYSE:SUN) and Permian Basin Royalty Trust (NYSE:PBT) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Volatility and Risk

Sunoco has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Permian Basin Royalty Trust has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares Sunoco and Permian Basin Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunoco	2.88%	18.78%	4.29%
Permian Basin Royalty Trust	91.96%	9,990.08%	510.19%

Dividends

Sunoco pays an annual dividend of $4.01 per share and has a dividend yield of 5.1%. Permian Basin Royalty Trust pays an annual dividend of $0.22 per share and has a dividend yield of 0.6%. Sunoco pays out 88.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Basin Royalty Trust pays out 62.9% of its earnings in the form of a dividend. Sunoco has increased its dividend for 3 consecutive years. Sunoco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sunoco and Permian Basin Royalty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunoco	0	1	8	1	3.00
Permian Basin Royalty Trust	0	1	0	0	2.00

Sunoco presently has a consensus price target of $79.00, suggesting a potential upside of 0.19%. Given Sunoco’s stronger consensus rating and higher probable upside, equities analysts clearly believe Sunoco is more favorable than Permian Basin Royalty Trust.

Earnings and Valuation

This table compares Sunoco and Permian Basin Royalty Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunoco	$25.20 billion	0.64	$527.00 million	$4.52	17.45
Permian Basin Royalty Trust	$16.13 million	99.98	$14.30 million	$0.35	98.85

Sunoco has higher revenue and earnings than Permian Basin Royalty Trust. Sunoco is trading at a lower price-to-earnings ratio than Permian Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

24.3% of Sunoco shares are held by institutional investors. Comparatively, 28.9% of Permian Basin Royalty Trust shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Sunoco beats Permian Basin Royalty Trust on 9 of the 17 factors compared between the two stocks.

About Sunoco

Sunoco LP, together with its subsidiaries, distributes and retails motor fuels in the United States. It operates through two segments: Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel, as well as other petroleum products, such as propane and lubricating oil from independent refiners and oil companies and supplies it to company-operated retail stores, independently operated commission agents, and retail stores, as well as other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities, and other industrial customers. It owns and operates retail stores under the APlus and Aloha Island Mart brand names; and offers food, beverages, snacks, grocery and non-food merchandise, motor fuels, and other services. The All Other segment includes partnership credit card services, franchise royalties, and retail operations; and offers credit card processing, car washes, lottery, automated teller machines, money order, prepaid phone cards, and wireless services. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in 2014. Sunoco LP was founded in 1886 and is headquartered in Dallas, Texas.

About Permian Basin Royalty Trust

Permian Basin Royalty Trust, an express trust, holds royalty interests in various oil and gas properties in the United States. The company holds a 75% net overriding royalty interest in the Waddell Ranch properties, including Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell fields in Crane County, Texas. It also holds a 95% net overriding royalty in the Texas Royalty properties, which consist of various producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole, and others located in Texas. Its Texas Royalty properties comprise approximately 125 separate royalty interests containing approximately 51,000 net producing acres. The company was founded in 1980 and is based in Dallas, Texas.