Energy XXI Gulf Coast (EXXI) & Sandridge Mississippian Trust I (SDT) Critical Analysis

Energy XXI Gulf Coast (NASDAQ: EXXI) and Sandridge Mississippian Trust I (NYSE:SDT) are both small-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Energy XXI Gulf Coast and Sandridge Mississippian Trust I, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy XXI Gulf Coast 0 0 0 0 N/A
Sandridge Mississippian Trust I 0 0 0 0 N/A

Institutional and Insider Ownership

83.6% of Energy XXI Gulf Coast shares are owned by institutional investors. Comparatively, 1.2% of Sandridge Mississippian Trust I shares are owned by institutional investors. 0.1% of Energy XXI Gulf Coast shares are owned 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.

Profitability

This table compares Energy XXI Gulf Coast and Sandridge Mississippian Trust I’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy XXI Gulf Coast N/A N/A N/A
Sandridge Mississippian Trust I 68.23% 20.24% 20.24%

Earnings & Valuation

This table compares Energy XXI Gulf Coast and Sandridge Mississippian Trust I’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy XXI Gulf Coast N/A N/A N/A N/A N/A
Sandridge Mississippian Trust I $18.14 million 1.27 $15.26 million $0.22 3.73

Sandridge Mississippian Trust I has higher revenue and earnings than Energy XXI Gulf Coast.

Dividends

Sandridge Mississippian Trust I pays an annual dividend of $0.17 per share and has a dividend yield of 20.7%. Energy XXI Gulf Coast does not pay a dividend. Sandridge Mississippian Trust I pays out 77.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Sandridge Mississippian Trust I beats Energy XXI Gulf Coast on 5 of the 8 factors compared between the two stocks.

About Energy XXI Gulf Coast

Energy XXI Gulf Coast, Inc. (EGC) is an independent oil and natural gas development and production company which was focused on development drilling on the Company’s core properties. The Company’s properties are located in the United States Gulf of Mexico waters and the Gulf Coast onshore. The Company operates nine oilfields on the Gulf of Mexico Shelf. As of December 31, 2016, total proved reserves were 121.9 million barrels of oil equivalents (MMBOE) of which 78% were crude oil. The Company operated in 616 gross producing wells on 439,294 net developed acres, including interests in 57 producing fields. The Company’s projects include Main Pass Complex, West Delta, Ship Shoal, Grand Isle and South Timbalier. The Main Pass complex is located in approximately 100 feet of water near the mouth of the mississippi river. It includes Main Pass 61 field and Main Pass 73 field along with the Main Pass 296 and 311.

About Sandridge Mississippian Trust I

SandRidge Mississippian Trust I is a statutory trust formed by and among SandRidge Energy, Inc. (SandRidge), The Bank of New York Mellon Trust Company, N.A., and The Corporation Trust Company. Sandridge offers various services to the Company, such as the operation of its development wells; remittance of net proceeds from the sale of associated production to the Company; administrative services, such as accounting, tax preparation, bookkeeping and informational services performed on behalf of the Company, and derivative agreement services related to production. The Company holds Royalty Interests in specified oil and natural gas properties located in the Mississippian formation in Alfalfa, Garfield, Grant and Woods counties in Oklahoma. The Mississippian formation is a carbonate hydrocarbon system located on the Anadarko Shelf. The top of the formation lies stratigraphically between the Pennsylvanian-aged Morrow formation and the Devonian-aged Woodford Shale formation.

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