Analyzing Alvopetro Energy (OTCMKTS:ALVOF) and Texas Pacific Land (NYSE:TPL)

Alvopetro Energy (OTCMKTS:ALVOF) and Texas Pacific Land (NYSE:TPL) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

Alvopetro Energy has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, Texas Pacific Land has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Institutional & Insider Ownership

59.9% of Texas Pacific Land shares are held by institutional investors. 6.9% of Texas Pacific Land shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Alvopetro Energy and Texas Pacific Land’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alvopetro Energy	37.69%	22.24%	17.66%
Texas Pacific Land	61.68%	38.15%	34.45%

Dividends

Alvopetro Energy pays an annual dividend of $0.40 per share and has a dividend yield of 8.8%. Texas Pacific Land pays an annual dividend of $6.40 per share and has a dividend yield of 0.7%. Alvopetro Energy pays out 76.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Texas Pacific Land pays out 30.9% of its earnings in the form of a dividend. Texas Pacific Land has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Alvopetro Energy and Texas Pacific Land, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alvopetro Energy	0	0	0	0	0.00
Texas Pacific Land	1	2	1	0	2.00

Texas Pacific Land has a consensus target price of $1,050.00, indicating a potential upside of 13.59%. Given Texas Pacific Land’s stronger consensus rating and higher possible upside, analysts plainly believe Texas Pacific Land is more favorable than Alvopetro Energy.

Earnings and Valuation

This table compares Alvopetro Energy and Texas Pacific Land”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alvopetro Energy	$45.52 million	3.65	$16.30 million	$0.52	8.69
Texas Pacific Land	$705.82 million	30.10	$453.96 million	$20.70	44.66

Texas Pacific Land has higher revenue and earnings than Alvopetro Energy. Alvopetro Energy is trading at a lower price-to-earnings ratio than Texas Pacific Land, indicating that it is currently the more affordable of the two stocks.

Summary

Texas Pacific Land beats Alvopetro Energy on 16 of the 17 factors compared between the two stocks.

About Alvopetro Energy

Alvopetro Energy Ltd. operates as an independent upstream and midstream operator. It engages in the acquisition, exploration, development, and production of hydrocarbons. The company holds interests in the Caburé and Murucututu natural gas assets, Block 182 and 183 exploration assets, and Bom Lugar and Mãe-da-lua oil fields, which covers an area of approximately 22,166 acres in the Recôncavo basin onshore Brazil. Alvopetro Energy Ltd. was incorporated in 2013 and is headquartered in Calgary, Canada.

About Texas Pacific Land

Texas Pacific Land Corporation engages in the land and resource management, and water services and operations businesses. The company owns a 1/128th nonparticipating perpetual oil and gas royalty interest (NPRI) under approximately 85,000 acres of land; a 1/16th NPRI under approximately 371,000 acres of land; and approximately 4,000 additional net royalty acres, total of approximately 195,000 NRA located in the western part of Texas. The Land and Resource Management segment manages surface acres of land, and oil and gas royalty interest in West Texas. This segment also engages in easements, such as transporting oil, gas and related hydrocarbons, power line and utility, and subsurface wellbore easements. In addition, this segment leases its land for processing, storage, and compression facilities and roads; and is involved in sale of materials, such as caliche, sand, and other material, as well as sells land. The Water Services and Operations segment provides full-service water offerings, including water sourcing, produced-water treatment, infrastructure development, and disposal solutions to operators in the Permian Basin. This segment also holds produced water royalties. Texas Pacific Land Corporation was founded in 1888 and is headquartered in Dallas, Texas.