Analyzing PermRock Royalty Trust (NYSE:PRT) and Southwestern Energy (NYSE:SWN)

PermRock Royalty Trust (NYSE:PRT) and Southwestern Energy (NYSE:SWN) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Profitability

This table compares PermRock Royalty Trust and Southwestern Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PermRock Royalty Trust N/A 12.03% 11.91%
Southwestern Energy 31.37% 14.07% 6.38%

Institutional & Insider Ownership

53.0% of PermRock Royalty Trust shares are held by institutional investors. 0.7% of Southwestern Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

PermRock Royalty Trust has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500. Comparatively, Southwestern Energy has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares PermRock Royalty Trust and Southwestern Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PermRock Royalty Trust $16.24 million 3.72 $15.59 million N/A N/A
Southwestern Energy $3.86 billion 0.22 $537.00 million $1.02 1.56

Southwestern Energy has higher revenue and earnings than PermRock Royalty Trust.

Analyst Recommendations

This is a breakdown of current ratings for PermRock Royalty Trust and Southwestern Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PermRock Royalty Trust 0 0 0 0 N/A
Southwestern Energy 3 8 1 0 1.83

Southwestern Energy has a consensus target price of $3.16, indicating a potential upside of 99.02%. Given Southwestern Energy’s higher possible upside, analysts clearly believe Southwestern Energy is more favorable than PermRock Royalty Trust.

Summary

Southwestern Energy beats PermRock Royalty Trust on 7 of the 12 factors compared between the two stocks.

PermRock Royalty Trust Company Profile

PermRock Royalty Trust owns 80% net profits interest in the oil and natural gas production properties acquired by Boaz Energy II, LLC in the Permian Basin, Texas. The company was founded in 2017 and is based in Fort Worth, Texas.

Southwestern Energy Company Profile

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil in the United States. It operates through two segments, Exploration and Production, and Midstream. The company focuses on the development of unconventional natural gas reservoirs located in Pennsylvania and West Virginia. As of December 31, 2018, it had approximately 184,024 net acres in Northeast Appalachia; and approximately 297,445 net acres in Southwest Appalachia. The company's estimated proved natural gas, oil, and NGLs reserves comprise 11,921 billion cubic feet of natural gas equivalent (Bcfe); and 6,364 Bcfe of proved undeveloped reserves. Southwestern Energy Company was founded in 1929 and is headquartered in Spring, Texas.

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