Texas Pacific Land (NYSE:TPL – Get Free Report) and W&T Offshore (NYSE:WTI – Get Free Report) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Texas Pacific Land and W&T Offshore, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Pacific Land | 0 | 1 | 2 | 0 | 2.67 |
| W&T Offshore | 1 | 0 | 1 | 1 | 2.67 |
Texas Pacific Land currently has a consensus target price of $639.00, indicating a potential upside of 134.30%. W&T Offshore has a consensus target price of $4.25, indicating a potential upside of 37.32%. Given Texas Pacific Land’s higher possible upside, equities analysts clearly believe Texas Pacific Land is more favorable than W&T Offshore.
Dividends
Texas Pacific Land pays an annual dividend of $2.40 per share and has a dividend yield of 0.9%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Texas Pacific Land pays out 28.2% of its earnings in the form of a dividend. W&T Offshore pays out -11.8% 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. Texas Pacific Land has raised its dividend for 3 consecutive years. W&T Offshore is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Texas Pacific Land and W&T Offshore”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Pacific Land | $798.19 million | 23.57 | $481.38 million | $8.51 | 32.05 |
| W&T Offshore | $501.46 million | 0.96 | -$150.06 million | ($0.34) | -9.10 |
Texas Pacific Land has higher revenue and earnings than W&T Offshore. W&T Offshore 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.
Volatility & Risk
Texas Pacific Land has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500.
Profitability
This table compares Texas Pacific Land and W&T Offshore’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Pacific Land | 60.71% | 36.22% | 32.54% |
| W&T Offshore | -8.44% | N/A | -1.72% |
Institutional and Insider Ownership
59.9% of Texas Pacific Land shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 0.3% of Texas Pacific Land shares are held by company insiders. Comparatively, 35.9% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Texas Pacific Land beats W&T Offshore on 13 of the 17 factors compared between the two stocks.
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.
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.
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