Financial Review: ECA Marcellus Trust I (OTCMKTS:ECT) versus SM Energy (NYSE:SM)

ECA Marcellus Trust I (OTCMKTS:ECT) and SM Energy (NYSE:SM) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Profitability

This table compares ECA Marcellus Trust I and SM Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ECA Marcellus Trust I	46.53%	4.37%	4.32%
SM Energy	33.89%	19.62%	10.87%

Institutional and Insider Ownership

2.0% of ECA Marcellus Trust I shares are held by institutional investors. Comparatively, 94.6% of SM Energy shares are held by institutional investors. 1.5% of SM Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for ECA Marcellus Trust I and SM Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ECA Marcellus Trust I	0	0	0	0	0.00
SM Energy	0	6	5	1	2.58

SM Energy has a consensus target price of $51.90, suggesting a potential upside of 38.90%. Given SM Energy’s stronger consensus rating and higher probable upside, analysts clearly believe SM Energy is more favorable than ECA Marcellus Trust I.

Valuation and Earnings

This table compares ECA Marcellus Trust I and SM Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ECA Marcellus Trust I	$4.15 million	1.70	$2.90 million	N/A	N/A
SM Energy	$2.37 billion	1.80	$817.88 million	$7.16	5.22

SM Energy has higher revenue and earnings than ECA Marcellus Trust I.

Volatility & Risk

ECA Marcellus Trust I has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, SM Energy has a beta of 4.11, indicating that its share price is 311% more volatile than the S&P 500.

Summary

SM Energy beats ECA Marcellus Trust I on 13 of the 14 factors compared between the two stocks.

About ECA Marcellus Trust I

ECA Marcellus Trust I is a statutory trust. It owns royalty interest in producing wells and development wells. It also acquires horizontal natural gas development wells to be drilled to the Marcellus Shale formation. The company was founded in March 2010 and is headquartered in Houston, TX.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.