Financial Analysis: Permian Basin Royalty Trust (PBT) and The Competition

Permian Basin Royalty Trust (NYSE:PBT) is one of 1,051 publicly-traded companies in the “Oil, Gas & Consumable Fuels” industry, but how does it compare to its peers? We will compare Permian Basin Royalty Trust to similar companies based on the strength of its dividends, institutional ownership, risk, profitability, analyst recommendations, valuation and earnings.

Profitability

This table compares Permian Basin Royalty Trust and its peers’ 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%
Permian Basin Royalty Trust Competitors	-455.90%	20.13%	6.34%

Earnings & Valuation

This table compares Permian Basin Royalty Trust and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Permian Basin Royalty Trust	$16.13 million	$14.30 million	82.86
Permian Basin Royalty Trust Competitors	$272.96 billion	$5.52 billion	-1.08

Permian Basin Royalty Trust’s peers have higher revenue and earnings than Permian Basin Royalty Trust. Permian Basin Royalty Trust is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Permian Basin Royalty Trust and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Basin Royalty Trust	0	1	0	0	2.00
Permian Basin Royalty Trust Competitors	5982	26997	40855	2423	2.52

As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 29.18%. Given Permian Basin Royalty Trust’s peers stronger consensus rating and higher possible upside, analysts plainly believe Permian Basin Royalty Trust has less favorable growth aspects than its peers.

Institutional & Insider Ownership

28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. Comparatively, 30.7% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by institutional investors. 15.5% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Permian Basin Royalty Trust pays an annual dividend of $0.54 per share and has a dividend yield of 1.9%. Permian Basin Royalty Trust pays out 154.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 9.1% and pay out -125.1% of their earnings in the form of a dividend. Permian Basin Royalty Trust lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Permian Basin Royalty Trust has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Permian Basin Royalty Trust’s peers have a beta of -3.75, meaning that their average stock price is 475% less volatile than the S&P 500.

Summary

Permian Basin Royalty Trust peers beat Permian Basin Royalty Trust on 10 of the 15 factors compared.

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.