Critical Survey: VOC Energy Trust (NYSE:VOC) vs. QEP Resources (QEP)

QEP Resources (NYSE: QEP) and VOC Energy Trust (NYSE:VOC) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Dividends

VOC Energy Trust pays an annual dividend of $0.44 per share and has a dividend yield of 12.2%. QEP Resources does not pay a dividend. VOC Energy Trust pays out 91.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

QEP Resources has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500. Comparatively, VOC Energy Trust has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Valuation and Earnings

This table compares QEP Resources and VOC Energy Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
QEP Resources $1.59 billion 1.13 $822.60 million ($0.26) -28.62
VOC Energy Trust $8.25 million 7.42 $8.16 million $0.48 7.50

QEP Resources has higher revenue and earnings than VOC Energy Trust. QEP Resources is trading at a lower price-to-earnings ratio than VOC Energy Trust, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.9% of QEP Resources shares are held by institutional investors. Comparatively, 7.7% of VOC Energy Trust shares are held by institutional investors. 1.4% of QEP Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares QEP Resources and VOC Energy Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QEP Resources -3.90% -4.24% -2.10%
VOC Energy Trust 90.57% 9.65% 9.65%

Analyst Recommendations

This is a summary of current ratings and target prices for QEP Resources and VOC Energy Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QEP Resources 0 7 8 1 2.63
VOC Energy Trust 0 0 0 0 N/A

QEP Resources currently has a consensus price target of $16.71, indicating a potential upside of 124.65%. Given QEP Resources’ higher probable upside, analysts clearly believe QEP Resources is more favorable than VOC Energy Trust.

Summary

QEP Resources beats VOC Energy Trust on 9 of the 15 factors compared between the two stocks.

QEP Resources Company Profile

QEP Resources, Inc. is an independent crude oil and natural gas exploration and production company. The Company focuses on two regions of the United States: the Northern Region (primarily in North Dakota, Wyoming and Utah) and the Southern Region (primarily in Texas and Louisiana). The Company conducts exploration and production activities in North America’s hydrocarbon resource plays. The Company has an inventory of developed and undeveloped drilling locations in the Permian Basin in western Texas, the Williston Basin in North Dakota, Haynesville/Cotton Valley in northwestern Louisiana, the Pinedale Anticline (Pinedale) in western Wyoming, the Uinta Basin in eastern Utah and other properties in Wyoming, Utah and Colorado. It sells gas volumes to wholesale marketers, industrial users, local distribution companies and utilities. It sells oil and natural gas liquid (NGL) volumes to refiners, marketers and other companies.

VOC Energy Trust Company Profile

VOC Energy Trust is a statutory trust formed by VOC Brazos Energy Partners, L.P. (VOC Brazos). The business and affairs of the Company are managed by The Bank of New York Mellon Trust Company, N.A., as trustee. The Company was created to acquire and hold the net profits interest for the benefit of its unitholders. VOC Brazos’ properties include interests in approximately 820 gross producing wells covering over 91,490 gross acres. VOC Brazos’ properties are developed properties located in oil and natural gas producing regions of Kansas and Texas. VOC Brazos’ fields in the Central Kansas Uplift include Fairport Field, Chase-Silica Field and Marcotte Field. VOC Brazos’ fields in Western Kansas include the Bindley, Moore-Johnson and Wesley fields. VOC Brazos’ fields in South Central Kansas include the Gerberding, Spivey Grabs and Alford fields. VOC Brazos’ proved reserved in Texas are located in the Central Texas and East Texas areas.

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