Permian Basin Royalty Trust (NYSE:PBT – Get Free Report) and W&T Offshore (NYSE:WTI – Get Free Report) are both small-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.
Volatility & Risk
Permian Basin Royalty Trust has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500.
Earnings and Valuation
This table compares Permian Basin Royalty Trust and W&T Offshore”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Permian Basin Royalty Trust | $16.13 million | 95.42 | $14.30 million | $0.35 | 94.35 |
| W&T Offshore | $501.46 million | 1.15 | -$150.06 million | ($0.73) | -5.21 |
Permian Basin Royalty Trust has higher earnings, but lower revenue than W&T Offshore. W&T Offshore 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.
Dividends
Permian Basin Royalty Trust pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Permian Basin Royalty Trust pays out 68.6% of its earnings in the form of a dividend. W&T Offshore pays out -5.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. W&T Offshore is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Permian Basin Royalty Trust and W&T Offshore, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Permian Basin Royalty Trust | 0 | 1 | 0 | 0 | 2.00 |
| W&T Offshore | 1 | 1 | 1 | 0 | 2.00 |
W&T Offshore has a consensus target price of $4.25, indicating a potential upside of 11.70%. Given W&T Offshore’s higher probable upside, analysts clearly believe W&T Offshore is more favorable than Permian Basin Royalty Trust.
Profitability
This table compares Permian Basin Royalty Trust and W&T Offshore’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Permian Basin Royalty Trust | 91.96% | 9,990.08% | 510.19% |
| W&T Offshore | -19.32% | N/A | -2.59% |
Insider and Institutional Ownership
28.9% of Permian Basin Royalty Trust shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 35.9% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Permian Basin Royalty Trust beats W&T Offshore on 8 of the 15 factors compared between the two stocks.
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.
About W&T Offshore
W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.
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