Analyzing VOC Energy Trust (NYSE:VOC) and EQT (NYSE:EQT)

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

Insider & Institutional Ownership

94.9% of EQT shares are held by institutional investors. Comparatively, 15.4% of VOC Energy Trust shares are held by institutional investors. 0.7% of EQT shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
EQT -14.65% 3.81% 2.06%
VOC Energy Trust 93.53% 18.42% 18.42%

Dividends

EQT pays an annual dividend of $0.12 per share and has a dividend yield of 2.2%. VOC Energy Trust pays an annual dividend of $0.44 per share and has a dividend yield of 10.5%. EQT pays out 7.1% of its earnings in the form of a dividend. VOC Energy Trust has raised its dividend for 2 consecutive years. VOC Energy Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for EQT and VOC Energy Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EQT 1 6 4 0 2.27
VOC Energy Trust 0 0 0 0 N/A

EQT presently has a consensus price target of $16.25, suggesting a potential upside of 200.37%. Given EQT’s higher probable upside, equities research analysts plainly believe EQT is more favorable than VOC Energy Trust.

Volatility & Risk

EQT has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, VOC Energy Trust has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.

Earnings & Valuation

This table compares EQT and VOC Energy Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EQT $4.56 billion 0.30 -$2.24 billion $1.70 3.18
VOC Energy Trust $12.94 million 5.52 $12.07 million N/A N/A

VOC Energy Trust has lower revenue, but higher earnings than EQT.

Summary

VOC Energy Trust beats EQT on 10 of the 15 factors compared between the two stocks.

About EQT

EQT Corporation operates as a natural gas production company in the United States. It produces natural gas, natural gas liquids (NGLs), and crude oil. As of December 31, 2018, this segment had 21.8 trillion cubic feet of proved natural gas, NGLs, and crude oil reserves across approximately 1.4 million gross acres. The company was founded in 1925 and is headquartered in Pittsburgh, Pennsylvania.

About VOC Energy Trust

VOC Energy Trust acquires and holds a term net profits interest of the net proceeds from production and sale of the interests in oil and natural gas properties in the states of Kansas and Texas. The company has a 80% term net profits interest of the net proceeds on the underlying properties. As of December 31, 2017, its underlying properties had interests in 492.5 net producing wells and 55,736.9 net acres; and had proved reserves of approximately 3.4 million barrels of oil equivalent (MMBoe) attributable to the portion of the Kansas underlying properties, and approximately 4.6 MMBoe attributable to the Texas underlying properties. VOC Energy Trust was founded in 2010 and is based in Houston, Texas.

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