Analyzing W&T Offshore (NYSE:WTI) and Granite Ridge Resources (NYSE:GRNT)

Granite Ridge Resources (NYSE:GRNT) and W&T Offshore (NYSE:WTI) are both small-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Granite Ridge Resources and W&T Offshore, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Ridge Resources	2	0	1	0	1.67
W&T Offshore	1	1	2	0	2.25

Granite Ridge Resources presently has a consensus price target of $11.00, indicating a potential upside of 123.80%. Given Granite Ridge Resources’ higher probable upside, research analysts clearly believe Granite Ridge Resources is more favorable than W&T Offshore.

Dividends

Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 9.0%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.0%. Granite Ridge Resources pays out -176.0% of its earnings in the form of a dividend. W&T Offshore pays out -4.2% 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. Granite Ridge Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Granite Ridge Resources has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.

Earnings and Valuation

This table compares Granite Ridge Resources and W&T Offshore”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Ridge Resources	$450.31 million	1.44	$24.35 million	($0.25)	-19.66
W&T Offshore	$501.46 million	1.21	-$150.06 million	($0.95)	-4.28

Granite Ridge Resources has higher earnings, but lower revenue than W&T Offshore. Granite Ridge Resources is trading at a lower price-to-earnings ratio than W&T Offshore, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Granite Ridge Resources and W&T Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Ridge Resources	-7.13%	4.99%	2.65%
W&T Offshore	-27.23%	N/A	-4.12%

Insider & Institutional Ownership

31.6% of Granite Ridge Resources shares are owned by institutional investors. Comparatively, 42.9% of W&T Offshore shares are owned by institutional investors. 8.4% of Granite Ridge Resources shares are owned by insiders. Comparatively, 35.9% of W&T Offshore shares are owned 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.

Summary

Granite Ridge Resources beats W&T Offshore on 9 of the 16 factors compared between the two stocks.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.

About W&T Offshore

W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.