Noble Energy (NYSE: NBL) and SandRidge Permian Trust (NYSE:PER) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitabiliy, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Valuation and Earnings

This table compares Noble Energy and SandRidge Permian Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Noble Energy $3.67 billion 3.32 $1.31 billion ($1.57) -18.00
SandRidge Permian Trust $26.72 million 5.70 $24.15 million $0.46 6.30

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

Institutional and Insider Ownership

97.4% of Noble Energy shares are held by institutional investors. Comparatively, 5.3% of SandRidge Permian Trust shares are held by institutional investors. 2.3% of Noble Energy shares are held by company insiders. Comparatively, 29.0% of SandRidge Permian Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Noble Energy has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, SandRidge Permian Trust has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Dividends

Noble Energy pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. SandRidge Permian Trust pays an annual dividend of $0.52 per share and has a dividend yield of 17.9%. Noble Energy pays out -25.5% of its earnings in the form of a dividend. SandRidge Permian Trust pays out 113.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Noble Energy and SandRidge Permian Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noble Energy -17.75% -0.44% -0.20%
SandRidge Permian Trust 87.06% 17.14% 17.14%

Analyst Ratings

This is a breakdown of recent ratings for Noble Energy and SandRidge Permian Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noble Energy 1 4 18 0 2.74
SandRidge Permian Trust 0 0 1 0 3.00

Noble Energy currently has a consensus price target of $43.21, suggesting a potential upside of 52.90%. Given Noble Energy’s higher possible upside, research analysts plainly believe Noble Energy is more favorable than SandRidge Permian Trust.

Summary

SandRidge Permian Trust beats Noble Energy on 8 of the 15 factors compared between the two stocks.

Noble Energy Company Profile

Noble Energy, Inc. is an independent energy company. The Company is engaged in crude oil, natural gas and natural gas and natural gas liquids (NGLs) exploration, development, production and acquisition. The Company’s segments include: United States, including the onshore DJ Basin, Permian Basin, Eagle Ford Shale, Marcellus Shale and offshore deepwater Gulf of Mexico, as well as the consolidated accounts of Noble Midstream Partners LP (Noble Midstream Partners); Eastern Mediterranean, including offshore Israel and Cyprus; West Africa, including offshore Equatorial Guinea, Cameroon and Gabon, and Other International and Corporate, including new ventures, such as offshore the Falkland Islands, Suriname and Newfoundland. The Company’s portfolio of assets is diversified through the United States and international projects and production mix among crude oil, natural gas and NGLs. Its business focuses on both the United States unconventional basins and certain global conventional basins.

SandRidge Permian Trust Company Profile

Sandridge Permian Trust (the Trust) is a statutory trust. The Trust holds Royalty Interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas. The Trust’s business activities are generally limited to owning the Royalty Interests, and entering into hedging arrangements at the inception of the Trust and activities related thereto, including activities required or permitted by the terms of the conveyances related to the Royalty Interests. The Trust’s properties consist of Royalty Interests in the initial wells and over 860 additional wells that are drilled and perforated for completion. The Royalty Interests are in properties located in the greater Fuhrman-Mascho field, a field in Andrews County, Texas that produces oil primarily from the Grayburg/San Andres formation in the Permian Basin. The Permian Basin extends throughout southwestern Texas and southeastern New Mexico over an area approximately 250 miles wide and over 300 miles long.

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