Reviewing W&T Offshore (NYSE:WTI) and Permian Resources (NYSE:PR)

Permian Resources (NYSE:PR) and W&T Offshore (NYSE:WTI) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Dividends

Permian Resources pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 2.4%. Permian Resources pays out 55.0% of its earnings in the form of a dividend. W&T Offshore pays out -4.0% 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. Permian Resources has increased its dividend for 1 consecutive years. Permian Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Permian Resources	15.65%	11.03%	6.98%
W&T Offshore	-29.25%	N/A	-6.26%

Risk and Volatility

Permian Resources has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	1	1	13	2	2.94
W&T Offshore	1	0	1	0	2.00

Permian Resources currently has a consensus target price of $19.07, suggesting a potential upside of 35.66%. Given Permian Resources’ stronger consensus rating and higher possible upside, analysts plainly believe Permian Resources is more favorable than W&T Offshore.

Earnings and Valuation

This table compares Permian 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
Permian Resources	$5.19 billion	2.24	$984.70 million	$1.09	12.89
W&T Offshore	$525.26 million	0.46	-$87.14 million	($0.99)	-1.65

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

Insider and Institutional Ownership

91.8% of Permian Resources shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 6.4% of Permian Resources shares are held by company insiders. Comparatively, 33.6% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Permian Resources beats W&T Offshore on 16 of the 18 factors compared between the two stocks.

About Permian Resources

Permian Resources Corporation, an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company’s assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, 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.