EPL Oil & Gas (EPL) versus San Juan Basin Royalty Trust (SJT) Critical Review

EPL Oil & Gas (NYSE: EPL) and San Juan Basin Royalty Trust (NYSE:SJT) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Valuation & Earnings

This table compares EPL Oil & Gas and San Juan Basin Royalty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EPL Oil & Gas N/A N/A N/A $1.77 N/A
San Juan Basin Royalty Trust $17.53 million 22.63 $13.92 million $0.78 10.91

San Juan Basin Royalty Trust has higher revenue and earnings than EPL Oil & Gas. EPL Oil & Gas 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.

Insider & Institutional Ownership

25.7% of San Juan Basin Royalty Trust shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares EPL Oil & Gas and San Juan Basin Royalty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EPL Oil & Gas N/A N/A N/A
San Juan Basin Royalty Trust 94.95% 499.42% 284.57%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for EPL Oil & Gas and San Juan Basin Royalty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EPL Oil & Gas 0 0 0 0 N/A
San Juan Basin Royalty Trust 0 0 0 0 N/A

Dividends

San Juan Basin Royalty Trust pays an annual dividend of $0.86 per share and has a dividend yield of 10.1%. EPL Oil & Gas does not pay a dividend. San Juan Basin Royalty Trust pays out 110.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EPL Oil & Gas has raised its dividend for 3 consecutive years.

Summary

San Juan Basin Royalty Trust beats EPL Oil & Gas on 6 of the 9 factors compared between the two stocks.

EPL Oil & Gas Company Profile

EPL Oil & Gas, Inc., formerly Energy Partners, Ltd., is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana and Houston, Texas. The Company’s operations are concentrated in the United States, Gulf of Mexico shelf focusing on state and federal waters offshore Louisiana, which it considers its core area. On February 14, 2011, the Company acquired an asset package consisting of certain shallow-water Gulf of Mexico shelf oil and natural gas interests surrounding the Mississippi River delta and a related gathering system (the ASOP Properties) from Anglo-Suisse Offshore Partners, LLC (ASOP). In April 2013, it sold certain non-operated assets. In June 2014, Energy XXI (Bermuda) Limited completed the acquisition of EPL Oil & Gas Inc.

San Juan Basin Royalty Trust Company Profile

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.

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