ECA Marcellus Trust I (ECT) and The Competition Critical Analysis

ECA Marcellus Trust I (NYSE: ECT) is one of 229 publicly-traded companies in the “Oil & Gas Exploration and Production” industry, but how does it compare to its competitors? We will compare ECA Marcellus Trust I to similar businesses based on the strength of its institutional ownership, valuation, profitability, earnings, analyst recommendations, dividends and risk.

Valuation & Earnings

This table compares ECA Marcellus Trust I and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
ECA Marcellus Trust I $4.75 million $3.47 million 6.97
ECA Marcellus Trust I Competitors $1.86 billion -$439.03 million -35.95

ECA Marcellus Trust I’s competitors have higher revenue, but lower earnings than ECA Marcellus Trust I. ECA Marcellus Trust I is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and target prices for ECA Marcellus Trust I and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ECA Marcellus Trust I 0 0 0 0 N/A
ECA Marcellus Trust I Competitors 1466 7662 12359 259 2.52

As a group, “Oil & Gas Exploration and Production” companies have a potential upside of 39.31%. Given ECA Marcellus Trust I’s competitors higher probable upside, analysts plainly believe ECA Marcellus Trust I has less favorable growth aspects than its competitors.

Profitability

This table compares ECA Marcellus Trust I and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ECA Marcellus Trust I 84.37% 10.85% 10.57%
ECA Marcellus Trust I Competitors -453.17% 20.19% 6.00%

Institutional and Insider Ownership

2.9% of ECA Marcellus Trust I shares are owned by institutional investors. Comparatively, 61.6% of shares of all “Oil & Gas Exploration and Production” companies are owned by institutional investors. 12.3% of shares of all “Oil & Gas Exploration and Production” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

ECA Marcellus Trust I has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, ECA Marcellus Trust I’s competitors have a beta of 1.38, indicating that their average share price is 38% more volatile than the S&P 500.

Dividends

ECA Marcellus Trust I pays an annual dividend of $0.29 per share and has a dividend yield of 12.6%. ECA Marcellus Trust I pays out 87.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil & Gas Exploration and Production” companies pay a dividend yield of 1.8% and pay out 133.5% of their earnings in the form of a dividend. ECA Marcellus Trust I is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

ECA Marcellus Trust I beats its competitors on 7 of the 12 factors compared.

ECA Marcellus Trust I Company Profile

ECA Marcellus Trust I (the Trust) is a statutory trust. The Trust is formed by Energy Corporation of America (ECA) to own royalty interests in natural gas properties owned and operated by ECA in the Marcellus Shale formation in Greene County, Pennsylvania. The Trust does not conduct any operations or activities. The Trust’s purpose is, in general, to hold the Royalty Interests to distribute to the Trust unitholders cash and to perform certain administrative functions in respect of the Royalty Interests and the Trust units. The Trust owns royalty interests in over 10 Producing Wells (the Producing Wells), and royalty interests in over 50 horizontal natural gas development wells to be drilled to the Marcellus Shale formation (the PUD Wells) within the area of mutual interest (AMI), in which ECA holds approximately 9,300 acres, of which it owned all of the working interests, in Greene County, Pennsylvania. It owns Royalty Interests in over 40 development wells that are in production.

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