Texas Pacific Land Trust (NYSE: TPL) and EQT (NYSE:EQT) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.
Volatility and Risk
Texas Pacific Land Trust has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, EQT has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.
39.7% of Texas Pacific Land Trust shares are held by institutional investors. 0.9% of Texas Pacific Land Trust shares are held by company insiders. Comparatively, 1.0% of EQT shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Texas Pacific Land Trust and EQT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Texas Pacific Land Trust||63.97%||152.03%||91.85%|
Texas Pacific Land Trust pays an annual dividend of $0.35 per share and has a dividend yield of 0.1%. EQT pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Texas Pacific Land Trust pays out 3.6% of its earnings in the form of a dividend. EQT pays out 60.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. EQT has increased its dividend for 6 consecutive years. EQT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and recommmendations for Texas Pacific Land Trust and EQT, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Texas Pacific Land Trust||0||0||0||0||N/A|
EQT has a consensus price target of $76.77, indicating a potential upside of 60.71%. Given EQT’s higher probable upside, analysts clearly believe EQT is more favorable than Texas Pacific Land Trust.
Valuation and Earnings
This table compares Texas Pacific Land Trust and EQT’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Texas Pacific Land Trust||$132.41 million||28.75||$76.36 million||$9.71||50.01|
|EQT||$1.61 billion||5.16||-$452.98 million||$0.20||238.85|
Texas Pacific Land Trust has higher earnings, but lower revenue than EQT. Texas Pacific Land Trust is trading at a lower price-to-earnings ratio than EQT, indicating that it is currently the more affordable of the two stocks.
Texas Pacific Land Trust beats EQT on 9 of the 16 factors compared between the two stocks.
Texas Pacific Land Trust Company Profile
Texas Pacific Land Trust (the Trust) is engaged in managing land, including royalty interests, for the benefit of its owners. The Company operates through managing the land segment, which includes sales and leases of such land, and the retention of oil and gas royalties. The Trust derives revenue from all avenues of managing the land, such as oil and gas royalties, grazing leases, easements, sundry and specialty leases, and land sales. The Trust has a perpetual oil and gas royalty interest in 459,200 acres. As of December 31, 2016, the Trust owned the surface estate in approximately 887,553 acres of land, consisting of numerous separate tracts, located in 18 counties in the western part of Texas. As of December 31, 2016, the Trust also owned a 1/128 nonparticipating perpetual oil and gas royalty interest under 85,414 acres of land and a 1/16 nonparticipating perpetual oil and gas royalty interest under 373,777 acres of land in the western part of Texas.
EQT Company Profile
EQT Corporation is a natural gas company. The Company operates through three segments: EQT Production, EQT Gathering and EQT Transmission. The EQT Production segment includes its exploration for, and development and production of, natural gas, natural gas liquids and a limited amount of crude oil, primarily in the Appalachian Basin. The EQT Production segment also includes the marketing activities of the Company. EQT Production’s properties are located in Pennsylvania, West Virginia, Kentucky and Virginia. The operations of EQT Gathering include the natural gas gathering activities of the Company, consisting solely of assets that are owned and operated by EQT Midstream Partners, LP (EQM). The operations of EQT Transmission include the natural gas transmission and storage activities of the Company, consisting solely of assets that are owned and operated by EQM. EQT Transmission focuses on various transmission projects, including Mountain Valley Pipeline and Transmission Expansion.
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