Head-To-Head Analysis: Parsley Energy (PE) versus SandRidge Permian Trust (PER)
Parsley Energy (NYSE: PE) and SandRidge Permian Trust (NYSE:PER) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitabiliy, institutional ownership, valuation, earnings, analyst recommendations and dividends.
SandRidge Permian Trust pays an annual dividend of $0.52 per share and has a dividend yield of 17.6%. Parsley Energy does not pay 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.
This table compares Parsley Energy and SandRidge Permian Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SandRidge Permian Trust||87.06%||17.14%||17.14%|
This is a summary of current recommendations for Parsley Energy and SandRidge Permian Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SandRidge Permian Trust||0||0||1||0||3.00|
Parsley Energy currently has a consensus target price of $40.25, indicating a potential upside of 41.28%. Given Parsley Energy’s higher possible upside, analysts plainly believe Parsley Energy is more favorable than SandRidge Permian Trust.
Institutional & Insider Ownership
91.6% of Parsley Energy shares are owned by institutional investors. Comparatively, 5.3% of SandRidge Permian Trust shares are owned by institutional investors. 15.5% of Parsley Energy shares are owned by insiders. Comparatively, 29.0% of SandRidge Permian Trust shares are owned by 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.
Valuation and Earnings
This table compares Parsley 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|
|Parsley Energy||$596.14 million||11.78||$357.89 million||($0.19)||-149.95|
|SandRidge Permian Trust||$26.72 million||5.80||$24.15 million||$0.46||6.41|
Parsley Energy has higher revenue and earnings than SandRidge Permian Trust. Parsley 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.
Risk and Volatility
Parsley Energy has a beta of -0.11, suggesting that its stock price is 111% less 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.
SandRidge Permian Trust beats Parsley Energy on 8 of the 15 factors compared between the two stocks.
Parsley Energy Company Profile
Parsley Energy, Inc. is a holding company. The Company is an independent oil and natural gas company. The Company focuses on the acquisition, development and exploitation of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and Southeastern New Mexico and includes three primary sub-areas: the Midland Basin, the Central Basin Platform and the Delaware Basin. The Company’s properties are primarily located in the Midland and Delaware Basins, where it focuses on horizontal development drilling and target various stacked pay intervals in the Spraberry, Wolfcamp, Upper Pennsylvanian (Cline) and Atoka shales. As of December 31, 2016, it had an average working interest of 87% in 166 gross (146.7 net) horizontal wells, of which 151 gross (132.4 net) are in the Midland Basin. As of December 31, 2016, the Company operated seven horizontal rigs and three vertical drilling rigs.
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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