Financial Analysis: Advantage Oil & Gas (AAV) & MV Oil Trust (MVO)

MV Oil Trust (NYSE: MVO) and Advantage Oil & Gas (NYSE:AAV) are both small-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Profitability

This table compares MV Oil Trust and Advantage Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MV Oil Trust 90.96% N/A 46.68%
Advantage Oil & Gas 27.06% 3.05% 2.48%

Analyst Ratings

This is a summary of current ratings and recommmendations for MV Oil Trust and Advantage Oil & Gas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MV Oil Trust 0 0 0 0 N/A
Advantage Oil & Gas 0 2 1 0 2.33

Advantage Oil & Gas has a consensus price target of $10.17, indicating a potential upside of 167.54%. Given Advantage Oil & Gas’ higher probable upside, analysts clearly believe Advantage Oil & Gas is more favorable than MV Oil Trust.

Insider & Institutional Ownership

9.5% of MV Oil Trust shares are owned by institutional investors. Comparatively, 54.8% of Advantage Oil & Gas shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

MV Oil Trust has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Advantage Oil & Gas has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Earnings and Valuation

This table compares MV Oil Trust and Advantage Oil & Gas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MV Oil Trust $5.50 million 18.94 $4.60 million $0.76 11.92
Advantage Oil & Gas $122.28 million 5.78 -$11.88 million $0.26 14.62

MV Oil Trust has higher earnings, but lower revenue than Advantage Oil & Gas. MV Oil Trust is trading at a lower price-to-earnings ratio than Advantage Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Dividends

MV Oil Trust pays an annual dividend of $0.88 per share and has a dividend yield of 9.7%. Advantage Oil & Gas does not pay a dividend. MV Oil Trust pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Advantage Oil & Gas beats MV Oil Trust on 8 of the 14 factors compared between the two stocks.

About MV Oil Trust

MV Oil Trust (the Trust) is a statutory trust. The Trust acquires and holds a term net profits interest for the benefit of the Trust unitholders. Its underlying properties consist of MV Partners, LLC’s (MV Partners) net interests in all of its oil and natural gas properties, which are located in the Mid-Continent region in the States of Kansas and Colorado. These oil and gas properties include approximately 1,000 producing oil and gas wells. The underlying properties located in the El Dorado Area are operated on behalf of MV Partners by Vess Oil Corporation (Vess Oil) and are located in the El Dorado, Augusta and Valley Center Fields. Each of Vess Oil and Murfin Drilling Company, Inc. (Murfin Drilling) operate leases on behalf of MV Partners included in the underlying properties that are located in the Northwest Kansas Area. The primary fields in this area are the Bemis-Shutts, Trapp, Ray and Hansen Fields.

About Advantage Oil & Gas

Advantage Oil & Gas Ltd. is an intermediate natural gas and liquids development and production company. The Company is engaged in the business of natural gas exploitation, development, acquisition and production in the Province of Alberta. The Company focuses on the development of Montney resource play at Glacier, Alberta in Western Canada. The Company has drilled over 10 Montney gas wells. The Glacier property lies along the Alberta side of the border with British Columbia between Grande Prairie, Alberta and Dawson Creek, British Columbia. The primary zones of interest are within the Triassic Montney and Doig formation siltstones. The Glacier property consists of over 90 net sections of land with Doig/Montney interests. It owns and operates a gas plant located at 5-02-76-12W6. It also holds interest in approximately 20 additional sections of Doig/Montney land rights in the Glacier, Valhalla and Wembley area proximal to its existing land holdings.

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