San Juan Basin Royalty Trust (SJT) vs. Whiting Petroleum Corporation (WLL) Critical Contrast

San Juan Basin Royalty Trust (NYSE: SJT) and Whiting Petroleum Corporation (NYSE:WLL) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitabiliy, dividends, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

27.3% of San Juan Basin Royalty Trust shares are held by institutional investors. Comparatively, 82.6% of Whiting Petroleum Corporation shares are held by institutional investors. 1.3% of Whiting Petroleum Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

San Juan Basin Royalty Trust has a beta of -0.46, suggesting that its share price is 146% less volatile than the S&P 500. Comparatively, Whiting Petroleum Corporation has a beta of 3.34, suggesting that its share price is 234% more volatile than the S&P 500.

Earnings & Valuation

This table compares San Juan Basin Royalty Trust and Whiting Petroleum Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
San Juan Basin Royalty Trust $23.10 million 14.45 $25.63 million $0.55 13.02
Whiting Petroleum Corporation $1.23 billion 1.40 $701.38 million ($3.48) -1.36

Whiting Petroleum Corporation has higher revenue and earnings than San Juan Basin Royalty Trust. Whiting Petroleum Corporation is trading at a lower price-to-earnings ratio than San Juan Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for San Juan Basin Royalty Trust and Whiting Petroleum Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
San Juan Basin Royalty Trust 0 0 0 0 N/A
Whiting Petroleum Corporation 3 12 10 1 2.35

Whiting Petroleum Corporation has a consensus target price of $11.23, suggesting a potential upside of 136.36%. Given Whiting Petroleum Corporation’s higher probable upside, analysts plainly believe Whiting Petroleum Corporation is more favorable than San Juan Basin Royalty Trust.

Dividends

San Juan Basin Royalty Trust pays an annual dividend of $0.73 per share and has a dividend yield of 10.2%. Whiting Petroleum Corporation does not pay a dividend. San Juan Basin Royalty Trust pays out 132.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. San Juan Basin Royalty Trust has increased its dividend for 3 consecutive years.

Profitability

This table compares San Juan Basin Royalty Trust and Whiting Petroleum Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
San Juan Basin Royalty Trust 92.24% 331.55% 224.75%
Whiting Petroleum Corporation -88.27% -6.77% -3.46%

Summary

Whiting Petroleum Corporation beats San Juan Basin Royalty Trust on 9 of the 16 factors compared between the two stocks.

About San Juan Basin Royalty Trust

San Juan Basin Royalty Trust is an express trust. The principal asset of the Trust is Royalty. Its Royalty is carved from working, royalty and other oil and natural gas interests owned by Southland Royalty Company, the predecessor to Burlington Resources Oil & Gas Company LP (Burlington), in properties located in the San Juan Basin of northwestern New Mexico (Subject Interests). The Trustee of the Trust is Compass Bank. The function of the Trustee is to collect the net proceeds attributable to the Royalty, to pay all expenses and charges of the Trust and distribute the remaining available income to the Unit Holders. The Trust does not operate the Subject Interests and is not empowered to carry on any business activity. It is a widely held fixed investment trust (WHFIT) and is classified as a non-mortgage widely held fixed investment trust (NMWHFIT) for federal income tax purposes. As of December 31, 2016, 99% of the Trust’s estimated proved reserves consisted of natural gas reserves.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation is an independent oil and gas company. The Company is engaged in development, production, acquisition and exploration activities primarily in the Rocky Mountains region of the United States. It is engaged in the exploration and production of crude oil, natural gas liquid (NGLs) and natural gas. Its Northern Rocky Mountains operations included properties in the Williston Basin of North Dakota and Montana targeting the Bakken and Three Forks formations and encompassing approximately 736,000 gross developed and undeveloped acres, as of December 31, 2016. Its Central Rocky Mountains operations included properties at its Redtail field in the Denver Julesburg Basin in Weld County, Colorado targeting the Niobrara and Codell/Fort Hays formations and encompassing approximately 157,200 gross developed and undeveloped acres, as of December 31, 2016. Its other operations primarily relate to non-core assets in Colorado, Mississippi, North Dakota, Texas and Wyoming.

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