VOC Energy Trust (VOC) versus Laredo Petroleum (LPI) Critical Survey

VOC Energy Trust (NYSE:VOC) and Laredo Petroleum (NYSE:LPI) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Profitability

This table compares VOC Energy Trust and Laredo Petroleum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VOC Energy Trust 91.56% 10.97% 10.97%
Laredo Petroleum 51.05% 25.80% 9.27%

Analyst Ratings

This is a breakdown of current ratings and target prices for VOC Energy Trust and Laredo Petroleum, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VOC Energy Trust 0 0 0 0 N/A
Laredo Petroleum 2 9 4 0 2.13

Laredo Petroleum has a consensus price target of $12.38, suggesting a potential upside of 82.39%. Given Laredo Petroleum’s higher possible upside, analysts clearly believe Laredo Petroleum is more favorable than VOC Energy Trust.

Dividends

VOC Energy Trust pays an annual dividend of $0.80 per share and has a dividend yield of 15.1%. Laredo Petroleum does not pay a dividend.

Volatility & Risk

VOC Energy Trust has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Laredo Petroleum has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Valuation and Earnings

This table compares VOC Energy Trust and Laredo Petroleum’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VOC Energy Trust $9.20 million 9.81 $8.41 million N/A N/A
Laredo Petroleum $822.16 million 1.94 $548.97 million $0.60 11.32

Laredo Petroleum has higher revenue and earnings than VOC Energy Trust.

Insider & Institutional Ownership

14.1% of VOC Energy Trust shares are held by institutional investors. 2.2% of Laredo Petroleum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Laredo Petroleum beats VOC Energy Trust on 7 of the 12 factors compared between the two stocks.

VOC Energy Trust Company Profile

VOC Energy Trust acquires and holds a term net profits interest of the net proceeds from production and sale of the interests in oil and natural gas properties in the states of Kansas and Texas. The company has a 80% term net profits interest of the net proceeds on the underlying properties. As of December 31, 2017, its underlying properties had interests in 492.5 net producing wells and 55,736.9 net acres; and had proved reserves of approximately 3.4 million barrels of oil equivalent (MMBoe) attributable to the portion of the Kansas underlying properties, and approximately 4.6 MMBoe attributable to the Texas underlying properties. VOC Energy Trust was founded in 2010 and is based in Houston, Texas.

Laredo Petroleum Company Profile

Laredo Petroleum, Inc. operates as an independent energy company in the United States. It operates through two segments, Exploration and Production; and Midstream and Marketing. The company engages in the acquisition, exploration, and development of oil and natural gas properties; and the transportation of oil and natural gas primarily in the Permian Basin in West Texas, as well as rig fuel, natural gas lift, and water delivery and takeaway services. As of December 31, 2017, it had assembled 124,843 net acres in the Permian Basin; and had total proved reserves of 215,883 thousand barrels of oil equivalent. The company was formerly known as Laredo Petroleum Holdings, Inc. and changed its name to Laredo Petroleum, Inc. in December 2013. Laredo Petroleum, Inc. was founded in 2006 and is headquartered in Tulsa, Oklahoma.

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