Comparing Enbridge (NYSE:ENB) & Mesa Royalty Trust (NYSE:MTR)

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

Risk & Volatility

Enbridge has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Mesa Royalty Trust has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Valuation & Earnings

This table compares Enbridge and Mesa Royalty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enbridge	$46.66 billion	2.28	$5.36 billion	$2.04	23.43
Mesa Royalty Trust	$476,742.00	7.47	$510,000.00	$0.16	11.96

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

Dividends

Enbridge pays an annual dividend of $2.75 per share and has a dividend yield of 5.8%. Mesa Royalty Trust pays an annual dividend of $0.29 per share and has a dividend yield of 15.2%. Enbridge pays out 134.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Enbridge has increased its dividend for 2 consecutive years and Mesa Royalty Trust has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

54.6% of Enbridge shares are held by institutional investors. Comparatively, 12.7% of Mesa Royalty Trust shares are held by institutional investors. 0.4% of Enbridge shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Enbridge and Mesa Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enbridge	7.37%	11.56%	3.08%
Mesa Royalty Trust	60.59%	9.17%	8.82%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Enbridge and Mesa Royalty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enbridge	0	5	9	1	2.73
Mesa Royalty Trust	1	0	0	0	1.00

Enbridge currently has a consensus target price of $65.88, indicating a potential upside of 37.80%. Given Enbridge’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Enbridge is more favorable than Mesa Royalty Trust.

Summary

Enbridge beats Mesa Royalty Trust on 14 of the 18 factors compared between the two stocks.

About Enbridge

Enbridge Inc. is a North American energy infrastructure company that transports and distributes energy. Its businesses include crude oil and liquids pipelines, natural gas transmission and storage, and natural gas utilities that serve homes and businesses. Founded in 1949 as Interprovincial Pipe Line Company, Enbridge has grown into a cross-border operator serving customers and energy markets in Canada and the United States. Its infrastructure moves crude oil, natural gas and natural gas liquids, connecting producers with refineries, utilities and other markets.

About Mesa Royalty Trust

Mesa Royalty Trust (NYSE:MTR) is a publicly traded grantor trust that holds royalty and net profits interests in certain oil and natural gas properties in the United States. The trust does not conduct exploration, drilling, or production operations itself; instead, it receives distributions based on the proceeds generated by the underlying properties after allowable operating and production expenses. The trust’s interests are primarily associated with producing properties in the Hugoton Field of southwestern Kansas and the Anadarko Basin of Texas and Oklahoma.