Head-To-Head Review: Mesa Royalty Trust (MTR) versus Sabine Royalty Trust (SBR)

Sabine Royalty Trust (NYSE:SBR) and Mesa Royalty Trust (NYSE:MTR) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Dividends

Sabine Royalty Trust pays an annual dividend of $3.29 per share and has a dividend yield of 8.7%. Mesa Royalty Trust pays an annual dividend of $1.26 per share and has a dividend yield of 9.5%. Mesa Royalty Trust has raised its dividend for 4 consecutive years. Mesa Royalty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Sabine Royalty Trust and Mesa Royalty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sabine Royalty Trust $37.20 million 14.89 $34.72 million N/A N/A
Mesa Royalty Trust $3.02 million 8.19 $2.93 million N/A N/A

Sabine Royalty Trust has higher revenue and earnings than Mesa Royalty Trust.

Volatility and Risk

Sabine Royalty Trust has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Mesa Royalty Trust has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Sabine Royalty Trust and Mesa Royalty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabine Royalty Trust 0 0 0 0 N/A
Mesa Royalty Trust 0 0 0 0 N/A

Profitability

This table compares Sabine Royalty Trust and Mesa Royalty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabine Royalty Trust 94.34% 823.90% 583.95%
Mesa Royalty Trust 94.00% 84.52% 69.55%

Institutional & Insider Ownership

9.7% of Sabine Royalty Trust shares are held by institutional investors. Comparatively, 14.8% of Mesa Royalty Trust shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Sabine Royalty Trust beats Mesa Royalty Trust on 7 of the 11 factors compared between the two stocks.

Sabine Royalty Trust Company Profile

Sabine Royalty Trust holds royalty and mineral interests in various oil and gas properties in the United States. Its royalty and mineral interests include landowner's royalties, overriding royalty interests, minerals, production payments, and other similar non-participatory interest in certain producing and proved undeveloped oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. The company was founded in 1982 and is based in Dallas, Texas.

Mesa Royalty Trust Company Profile

Mesa Royalty Trust holds net overriding royalty interests in various oil and gas properties in the United States. It has interests in properties located in the Hugoton field of Kansas; and the San Juan Basin field of New Mexico and Colorado. The company was founded in 1979 and is based in Houston, Texas.

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