San Juan Basin Royalty Trust (SJT) versus Occidental Petroleum Corporation (OXY) Critical Survey
San Juan Basin Royalty Trust (NYSE: SJT) and Occidental Petroleum Corporation (NYSE:OXY) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
Institutional & Insider Ownership
27.1% of San Juan Basin Royalty Trust shares are held by institutional investors. Comparatively, 80.5% of Occidental Petroleum Corporation 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, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings and target prices for San Juan Basin Royalty Trust and Occidental Petroleum Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|San Juan Basin Royalty Trust||0||0||0||0||N/A|
|Occidental Petroleum Corporation||2||10||6||0||2.22|
Occidental Petroleum Corporation has a consensus price target of $65.73, suggesting a potential upside of 1.72%. Given Occidental Petroleum Corporation’s higher possible upside, analysts plainly believe Occidental Petroleum Corporation is more favorable than San Juan Basin Royalty Trust.
This table compares San Juan Basin Royalty Trust and Occidental Petroleum Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|San Juan Basin Royalty Trust||92.24%||337.99%||232.21%|
|Occidental Petroleum Corporation||0.91%||0.13%||0.06%|
Volatility & Risk
San Juan Basin Royalty Trust has a beta of -0.41, suggesting that its stock price is 141% less volatile than the S&P 500. Comparatively, Occidental Petroleum Corporation has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.
San Juan Basin Royalty Trust pays an annual dividend of $2.60 per share and has a dividend yield of 33.9%. Occidental Petroleum Corporation pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. San Juan Basin Royalty Trust pays out 472.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. San Juan Basin Royalty Trust has increased its dividend for 14 consecutive years and Occidental Petroleum Corporation has increased its dividend for 3 consecutive years. San Juan Basin Royalty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares San Juan Basin Royalty Trust and Occidental Petroleum Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|San Juan Basin Royalty Trust||$28.01 million||12.78||$25.63 million||$0.55||13.96|
|Occidental Petroleum Corporation||$11.45 billion||4.31||$3.67 billion||$0.13||497.08|
Occidental Petroleum Corporation has higher revenue and earnings than San Juan Basin Royalty Trust. San Juan Basin Royalty Trust 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.
San Juan Basin Royalty Trust Company Profile
San Juan Basin Royalty Trust is an express trust. The principal asset of the Trust is Royalty. Its Royalty is carved from working, royalty and other oil and natural gas interests owned by Southland Royalty Company, the predecessor to Burlington Resources Oil & Gas Company LP (Burlington), in properties located in the San Juan Basin of northwestern New Mexico (Subject Interests). The Trustee of the Trust is Compass Bank. The function of the Trustee is to collect the net proceeds attributable to the Royalty, to pay all expenses and charges of the Trust and distribute the remaining available income to the Unit Holders. The Trust does not operate the Subject Interests and is not empowered to carry on any business activity. It is a widely held fixed investment trust (WHFIT) and is classified as a non-mortgage widely held fixed investment trust (NMWHFIT) for federal income tax purposes. As of December 31, 2016, 99% of the Trust’s estimated proved reserves consisted of natural gas reserves.
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).
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