Contrasting Mesa Royalty Trust (NYSE:MTR) & Western Midstream Partners (NYSE:WES)

Mesa Royalty Trust (NYSE:MTR) and Western Midstream Partners (NYSE:WES) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and target prices for Mesa Royalty Trust and Western Midstream Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesa Royalty Trust	1	0	0	0	1.00
Western Midstream Partners	0	6	3	2	2.64

Western Midstream Partners has a consensus target price of $49.89, suggesting a potential upside of 5.78%. Given Western Midstream Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Western Midstream Partners is more favorable than Mesa Royalty Trust.

Earnings & Valuation

This table compares Mesa Royalty Trust and Western Midstream Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesa Royalty Trust	$600,000.00	7.53	$510,000.00	$0.16	15.19
Western Midstream Partners	$3.84 billion	5.07	$1.18 billion	$3.18	14.83

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

Institutional & Insider Ownership

12.7% of Mesa Royalty Trust shares are held by institutional investors. Comparatively, 84.8% of Western Midstream Partners shares are held by institutional investors. 0.0% of Western Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Mesa Royalty Trust has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Western Midstream Partners has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Profitability

This table compares Mesa Royalty Trust and Western Midstream Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mesa Royalty Trust	60.59%	9.17%	8.82%
Western Midstream Partners	29.44%	33.13%	8.74%

Summary

Western Midstream Partners beats Mesa Royalty Trust on 11 of the 15 factors compared between the two stocks.

About Mesa Royalty Trust

Mesa Royalty Trust owns overriding royalty interests in various oil and gas producing properties in the United States. It holds interests in properties located in the Hugoton field of Kansas; and the San Juan Basin field of Northwestern New Mexico and Southwestern Colorado. The company was founded in 1979 and is based in Houston, Texas.

About Western Midstream Partners

Western Midstream Partners, LP, together with its subsidiaries, operates as a midstream energy company primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. The company also buys and sells natural gas, NGLs, and condensate. It operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.