Occidental Petroleum Corporation (OXY) versus SandRidge Mississippian Trust II (SDR) Financial Analysis
Occidental Petroleum Corporation (NYSE: OXY) and SandRidge Mississippian Trust II (NYSE:SDR) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Institutional and Insider Ownership
80.6% of Occidental Petroleum Corporation shares are held by institutional investors. Comparatively, 0.9% of SandRidge Mississippian Trust II shares are held by institutional investors. 0.3% of Occidental Petroleum Corporation shares are held by 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.
This is a summary of recent recommendations and price targets for Occidental Petroleum Corporation and SandRidge Mississippian Trust II, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Occidental Petroleum Corporation||2||9||6||0||2.24|
|SandRidge Mississippian Trust II||0||0||0||0||N/A|
Occidental Petroleum Corporation presently has a consensus target price of $65.50, suggesting a potential upside of 1.79%. Given Occidental Petroleum Corporation’s higher possible upside, research analysts clearly believe Occidental Petroleum Corporation is more favorable than SandRidge Mississippian Trust II.
Occidental Petroleum Corporation pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. SandRidge Mississippian Trust II pays an annual dividend of $0.20 per share and has a dividend yield of 14.7%. Occidental Petroleum Corporation pays out 2,369.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Mississippian Trust II pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Mississippian Trust II has raised its dividend for 14 consecutive years. SandRidge Mississippian Trust II is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Occidental Petroleum Corporation and SandRidge Mississippian Trust II’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Occidental Petroleum Corporation||$11.45 billion||4.30||$3.67 billion||$0.13||495.00|
|SandRidge Mississippian Trust II||$15.52 million||4.36||$11.93 million||$0.24||5.67|
Occidental Petroleum Corporation has higher revenue and earnings than SandRidge Mississippian Trust II. SandRidge Mississippian Trust II is trading at a lower price-to-earnings ratio than Occidental Petroleum Corporation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Occidental Petroleum Corporation has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, SandRidge Mississippian Trust II has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.
This table compares Occidental Petroleum Corporation and SandRidge Mississippian Trust II’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Occidental Petroleum Corporation||0.91%||0.13%||0.06%|
|SandRidge Mississippian Trust II||74.71%||13.88%||13.88%|
SandRidge Mississippian Trust II beats Occidental Petroleum Corporation on 9 of the 16 factors compared between the two stocks.
Occidental Petroleum Corporation Company Profile
Occidental Petroleum Corporation (Occidental) is an oil and gas exploration and production company. The Company operates through three segments: oil and gas, chemical (OxyChem), and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, natural gas liquids (NGLs) and natural gas. The OxyChem segment manufactures and markets basic chemicals and vinyls. The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO2) and power. The Company also trades around its assets, including transportation and storage capacity. Additionally, the midstream and marketing segment invests in entities that conduct similar activities. Occidental’s domestic upstream oil and gas operations are located in New Mexico and Texas. Its international operations are located in Bolivia, Colombia, Oman, Qatar and the United Arab Emirates (UAE).
SandRidge Mississippian Trust II Company Profile
SandRidge Mississippian Trust II is a statutory trust. The royalty interests conveyed by SandRidge Energy, Inc. (SandRidge) from its interests in certain properties in the Mississippian formation in northern Oklahoma and southern Kansas and held by the Trust are referred to as the Royalty Interests. The Trust holds Royalty Interests in specified oil and natural gas properties. The Royalty Interests entitle the Trust to receive approximately 80% of the proceeds from the sale of oil, natural gas and natural gas liquids (NGLs) production attributable to SandRidge’s net revenue interest in approximately 50 wells producing and over 10 additional wells awaiting (together, the Initial Wells), and over 70% of the proceeds from the sale of oil, natural gas and NGL production attributable to SandRidge’s net revenue interest in approximately 200 horizontal oil and natural gas development wells drilled (the Trust Development Wells) within an area of mutual interest (AMI).
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