Comparing Permian Basin Royalty Trust (NYSE:PBT) and SFL (NYSE:SFL)

SFL (NYSE:SFL) and Permian Basin Royalty Trust (NYSE:PBT) are both small-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Profitability

This table compares SFL and Permian Basin Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SFL	12.30%	6.10%	1.74%
Permian Basin Royalty Trust	85.87%	8,126.17%	593.15%

Institutional and Insider Ownership

28.6% of SFL shares are owned by institutional investors. Comparatively, 28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for SFL and Permian Basin Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SFL	0	1	2	0	2.67
Permian Basin Royalty Trust	0	1	0	0	2.00

SFL presently has a consensus price target of $14.00, indicating a potential upside of 28.35%. Given SFL’s stronger consensus rating and higher probable upside, research analysts plainly believe SFL is more favorable than Permian Basin Royalty Trust.

Risk & Volatility

SFL has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, Permian Basin Royalty Trust has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Earnings and Valuation

This table compares SFL and Permian Basin Royalty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SFL	$729.11 million	2.16	-$26.43 million	$0.67	16.28
Permian Basin Royalty Trust	$16.13 million	89.38	$14.30 million	$0.35	88.37

Permian Basin Royalty Trust has lower revenue, but higher earnings than SFL. SFL is trading at a lower price-to-earnings ratio than Permian Basin Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

SFL pays an annual dividend of $0.88 per share and has a dividend yield of 8.1%. Permian Basin Royalty Trust pays an annual dividend of $0.54 per share and has a dividend yield of 1.7%. SFL pays out 131.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Basin Royalty Trust pays out 154.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SFL has raised its dividend for 1 consecutive years. SFL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

SFL beats Permian Basin Royalty Trust on 9 of the 16 factors compared between the two stocks.

About SFL

SFL Corporation Ltd. is an international ship-owning and maritime transportation company that acquires and charters vessels and offshore assets. Its fleet has included crude oil and product tankers, dry bulk carriers, container ships, car carriers and drilling units. The company earns revenue primarily by chartering its assets to shipping and energy customers, often under long-term agreements. Its vessels serve global trade routes, transporting commodities, cargo and vehicles between markets around the world.

About Permian Basin Royalty Trust

Permian Basin Royalty Trust is a Texas-based express trust that owns royalty and net profits interests in oil and natural gas properties. It does not operate wells; instead, it receives proceeds from production after applicable costs and distributes available amounts to its unitholders. The trust’s interests include properties in the Permian Basin of West Texas, including the Waddell Ranch properties and other Texas royalty interests. Production and operating activities are carried out by the operators of those properties.