Financial Comparison: Mesa Royalty Trust (NYSE:MTR) vs. DT Midstream (NYSE:DTM)

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

Dividends

Mesa Royalty Trust pays an annual dividend of $0.29 per share and has a dividend yield of 14.5%. DT Midstream pays an annual dividend of $3.52 per share and has a dividend yield of 2.8%. Mesa Royalty Trust pays out 181.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DT Midstream pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mesa Royalty Trust has raised its dividend for 1 consecutive years and DT Midstream has raised its dividend for 2 consecutive years.

Insider and Institutional Ownership

12.7% of Mesa Royalty Trust shares are owned by institutional investors. Comparatively, 81.5% of DT Midstream shares are owned by institutional investors. 0.5% of DT Midstream shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesa Royalty Trust	$476,742.00	7.80	$510,000.00	$0.16	12.47
DT Midstream	$1.24 billion	10.22	$441.00 million	$4.60	27.07

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

Volatility and Risk

Mesa Royalty Trust has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, DT Midstream has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Mesa Royalty Trust and DT Midstream’s 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%
DT Midstream	35.36%	9.59%	4.62%

Analyst Recommendations

This is a breakdown of current ratings for Mesa Royalty Trust and DT Midstream, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesa Royalty Trust	1	0	0	0	1.00
DT Midstream	1	4	10	0	2.60

DT Midstream has a consensus price target of $151.50, suggesting a potential upside of 21.67%. Given DT Midstream’s stronger consensus rating and higher probable upside, analysts plainly believe DT Midstream is more favorable than Mesa Royalty Trust.

Summary

DT Midstream beats Mesa Royalty Trust on 14 of the 17 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 DT Midstream

DT Midstream, Inc., together with its subsidiaries, provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. The Pipeline segment owns and operates interstate and intrastate natural gas pipelines, storage systems, and natural gas gathering lateral pipelines. This segment also engages in the transportation and storage of natural gas for intermediate and end-user customers. The Gathering segment owns and operates gas gathering systems. This segment is involved in the collection of natural gas for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines for transportation; and provision of associated ancillary services, including compression, dehydration, gas treatment, water impoundment, water transportation, water disposal, and sand mining. It serves natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. The company was incorporated in 2021 and is headquartered in Detroit, Michigan.