Freehold Royalties (OTCMKTS:FRHLF – Get Free Report) and Permian Basin Royalty Trust (NYSE:PBT – Get Free Report) are both small-cap energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.
Dividends
Freehold Royalties pays an annual dividend of $0.78 per share and has a dividend yield of 6.4%. Permian Basin Royalty Trust pays an annual dividend of $0.23 per share and has a dividend yield of 0.7%. Freehold Royalties pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Basin Royalty Trust pays out 65.7% of its earnings in the form of a dividend.
Institutional and Insider Ownership
28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Freehold Royalties and Permian Basin Royalty Trust, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Freehold Royalties | 0 | 5 | 0 | 0 | 2.00 |
| Permian Basin Royalty Trust | 0 | 1 | 0 | 0 | 2.00 |
Profitability
This table compares Freehold Royalties and Permian Basin Royalty Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Freehold Royalties | 43.59% | 13.90% | 10.09% |
| Permian Basin Royalty Trust | 91.96% | 9,990.08% | 510.19% |
Earnings & Valuation
This table compares Freehold Royalties and Permian Basin Royalty Trust”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Freehold Royalties | $224.34 million | 8.87 | $65.69 million | $0.61 | 19.89 |
| Permian Basin Royalty Trust | $17.69 million | 88.74 | $14.30 million | $0.35 | 96.25 |
Freehold Royalties has higher revenue and earnings than Permian Basin Royalty Trust. Freehold Royalties is trading at a lower price-to-earnings ratio than Permian Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.
Summary
Permian Basin Royalty Trust beats Freehold Royalties on 7 of the 11 factors compared between the two stocks.
About Freehold Royalties
Freehold Royalties Ltd. engages in the acquiring and managing royalty interests in the crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. Freehold Royalties Ltd. was founded in 1996 and is headquartered in Calgary, Canada.
About Permian Basin Royalty Trust
Permian Basin Royalty Trust, an express trust, holds royalty interests in various oil and gas properties in the United States. The company holds a 75% net overriding royalty interest in the Waddell Ranch properties, including Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell fields in Crane County, Texas. It also holds a 95% net overriding royalty in the Texas Royalty properties, which consist of various producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole, and others located in Texas. Its Texas Royalty properties comprise approximately 125 separate royalty interests containing approximately 51,000 net producing acres. The company was founded in 1980 and is based in Dallas, Texas.
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