SandRidge Permian Trust (NYSE: PER) and Matador Resources (NYSE:MTDR) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Analyst Ratings

This is a summary of current recommendations for SandRidge Permian Trust and Matador Resources, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SandRidge Permian Trust 0 0 0 0 N/A
Matador Resources 0 5 12 0 2.71

Matador Resources has a consensus target price of $30.00, indicating a potential downside of 4.31%. Given Matador Resources’ higher possible upside, analysts clearly believe Matador Resources is more favorable than SandRidge Permian Trust.

Volatility & Risk

SandRidge Permian Trust has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Matador Resources has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

4.1% of SandRidge Permian Trust shares are owned by institutional investors. Comparatively, 85.1% of Matador Resources shares are owned by institutional investors. 29.0% of SandRidge Permian Trust shares are owned by company insiders. Comparatively, 11.9% of Matador Resources shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares SandRidge Permian Trust and Matador Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SandRidge Permian Trust 88.09% 19.59% 19.59%
Matador Resources 40.30% 5.99% 3.15%

Valuation and Earnings

This table compares SandRidge Permian Trust and Matador Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SandRidge Permian Trust $29.87 million 3.62 $25.64 million $0.50 4.12
Matador Resources $264.42 million 12.86 -$97.42 million $1.96 15.99

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

Dividends

SandRidge Permian Trust pays an annual dividend of $0.38 per share and has a dividend yield of 18.4%. Matador Resources does not pay a dividend. SandRidge Permian Trust pays out 76.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Matador Resources beats SandRidge Permian Trust on 9 of the 15 factors compared between the two stocks.

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.

Matador Resources Company Profile

Matador Resources Company is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s segments include exploration and production, and midstream. The Company’s operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. Additionally, the Company conducts midstream operations primarily, as of February 17, 2017, through its midstream joint venture, San Mateo Midstream, LLC (San Mateo or the Joint Venture).

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