San Juan Basin Royalty Trust (NYSE: SJT) and EXCO Resources (NYSE:XCO) are both small-cap energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.
Institutional & Insider Ownership
25.7% of San Juan Basin Royalty Trust shares are held by institutional investors. Comparatively, 56.3% of EXCO Resources shares are held by institutional investors. 1.4% of EXCO Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares San Juan Basin Royalty Trust and EXCO Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|San Juan Basin Royalty Trust||$17.53 million||23.19||$13.92 million||$0.79||11.04|
|EXCO Resources||$271.00 million||0.05||-$225.25 million||$3.84||0.17|
San Juan Basin Royalty Trust has higher earnings, but lower revenue than EXCO Resources. EXCO Resources is trading at a lower price-to-earnings ratio than San Juan Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for San Juan Basin Royalty Trust and EXCO Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|San Juan Basin Royalty Trust||0||0||0||0||N/A|
Volatility and Risk
San Juan Basin Royalty Trust has a beta of -0.3, suggesting that its stock price is 130% less volatile than the S&P 500. Comparatively, EXCO Resources has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.
This table compares San Juan Basin Royalty Trust and EXCO Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|San Juan Basin Royalty Trust||94.95%||499.42%||284.57%|
San Juan Basin Royalty Trust pays an annual dividend of $0.80 per share and has a dividend yield of 9.2%. EXCO Resources does not pay a dividend. San Juan Basin Royalty Trust pays out 101.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. San Juan Basin Royalty Trust has raised its dividend for 4 consecutive years and EXCO Resources has raised its dividend for 5 consecutive years.
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.
EXCO Resources Company Profile
EXCO Resources, Inc. (EXCO) is an oil and natural gas company. The Company is engaged in the exploration, exploitation, acquisition, development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The Company’s principal operations are conducted in certain United States oil and natural gas areas, including Texas, Louisiana and the Appalachia region. The Company holds acreage positions in approximately three shale plays in the United States, including East Texas and North Louisiana, South Texas and Appalachia. In East Texas and North Louisiana, the Company holds approximately 83,800 net acres in the Haynesville and Bossier shales. In South Texas, it holds approximately 65,800 net acres in the Eagle Ford shale. In Appalachia, the Company holds approximately 137,400 net acres prospective in the Marcellus shale.
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