Prairie Operating (NASDAQ:PROP) versus Permian Basin Royalty Trust (NYSE:PBT) Critical Analysis

Permian Basin Royalty Trust (NYSE:PBT) and Prairie Operating (NASDAQ:PROP) are both small-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Permian Basin Royalty Trust and Prairie Operating, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Basin Royalty Trust	0	1	0	0	2.00
Prairie Operating	2	0	1	0	1.67

Prairie Operating has a consensus target price of $2.75, indicating a potential upside of 650.55%. Given Prairie Operating’s higher probable upside, analysts clearly believe Prairie Operating is more favorable than Permian Basin Royalty Trust.

Valuation & Earnings

This table compares Permian Basin Royalty Trust and Prairie Operating”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Basin Royalty Trust	$17.69 million	88.75	$14.30 million	$0.35	96.27
Prairie Operating	$241.65 million	0.17	$32.05 million	($2.05)	-0.18

Prairie Operating has higher revenue and earnings than Permian Basin Royalty Trust. Prairie Operating 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 and Institutional Ownership

28.9% of Permian Basin Royalty Trust shares are held by institutional investors. Comparatively, 34.3% of Prairie Operating shares are held by institutional investors. 3.1% of Prairie Operating shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Permian Basin Royalty Trust and Prairie Operating’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%
Prairie Operating	-13.02%	46.53%	5.51%

Risk and Volatility

Permian Basin Royalty Trust has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Prairie Operating has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

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 Prairie Operating

Prairie Operating Co., an independent energy company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company holds assets in the Denver-Julesburg Basin in Colorado; and the Niobrara and Codell formations. Prairie Operating Co. is based in Houston Texas.