Critical Survey: Pacific Coast Oil Trust (ROYT) vs. Pengrowth Energy (PGH)

Pacific Coast Oil Trust (NYSE: ROYT) and Pengrowth Energy (NYSE:PGH) are both small-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Insider and Institutional Ownership

16.4% of Pacific Coast Oil Trust shares are owned by institutional investors. Comparatively, 14.5% of Pengrowth Energy shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Pacific Coast Oil Trust and Pengrowth Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Coast Oil Trust 6.02% 1.44% 1.43%
Pengrowth Energy -101.66% -38.22% -14.60%

Dividends

Pacific Coast Oil Trust pays an annual dividend of $0.19 per share and has a dividend yield of 11.1%. Pengrowth Energy does not pay a dividend. Pacific Coast Oil Trust pays out 237.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings for Pacific Coast Oil Trust and Pengrowth Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Coast Oil Trust 0 1 0 0 2.00
Pengrowth Energy 7 1 0 0 1.13

Pacific Coast Oil Trust presently has a consensus price target of $1.50, indicating a potential downside of 12.28%. Pengrowth Energy has a consensus price target of $2.19, indicating a potential upside of 184.09%. Given Pengrowth Energy’s higher probable upside, analysts clearly believe Pengrowth Energy is more favorable than Pacific Coast Oil Trust.

Risk & Volatility

Pacific Coast Oil Trust has a beta of 2.18, suggesting that its share price is 118% more volatile than the S&P 500. Comparatively, Pengrowth Energy has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.

Valuation and Earnings

This table compares Pacific Coast Oil Trust and Pengrowth Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Coast Oil Trust $32.19 million 2.05 $220,000.00 $0.08 21.38
Pengrowth Energy $427.50 million 0.99 -$221.80 million ($0.79) -0.97

Pacific Coast Oil Trust has higher earnings, but lower revenue than Pengrowth Energy. Pengrowth Energy is trading at a lower price-to-earnings ratio than Pacific Coast Oil Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Pacific Coast Oil Trust beats Pengrowth Energy on 9 of the 13 factors compared between the two stocks.

Pacific Coast Oil Trust Company Profile

Pacific Coast Oil Trust is a statutory trust formed by Pacific Coast Energy Company LP (PCEC). The Trust is engaged in acquiring and holding net profits and royalty interests in certain oil and natural gas properties located in California for the benefit of the Trust unitholders. The Underlying Properties consist of producing and non-producing interests in oil units, wells and lands located onshore in California in the Santa Maria Basin, which contains PCEC’s Orcutt properties, and the Los Angeles Basin, which contains PCEC’s West Pico, East Coyote and Sawtelle properties. The Underlying Properties consist of the proved developed reserves referred to as the Developed Properties and all other development potential on the Underlying Properties, which are referred to as the Remaining Properties. Production from the Developed Properties attributable to the Trust is produced from wells that, because they have already been drilled and require limited additional capital expenditures.

Pengrowth Energy Company Profile

Pengrowth Energy Corporation is engaged in the development, production and acquisition of, and the exploration for, oil and natural gas reserves in the provinces of Alberta, British Columbia, Saskatchewan and Nova Scotia. The Lindbergh thermal property is located approximately 420 kilometers north east of Calgary, Alberta and 50 kilometers south of Bonnyville, Alberta. Its Greater Olds/Garrington area is located approximately 100 kilometers north of Calgary, Alberta. It has varied Working Interests within the Swan Hills area in all of the properties throughout this regional Beaverhill Lake resource base. These are both operated and non-operated, unit and non-unit properties in Judy Creek, Carson Creek, House Mountain, Deer Mountain, Swan Hills, South Swan Hills and Freeman. The properties are located approximately 200 kilometers northwest of Edmonton, Alberta. Its Groundbirch property is located approximately 40 kilometers south west of Fort St. John, British Columbia.

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