Reviewing Mesa Royalty Trust (NYSE:MTR) & Plains GP (NYSE:PAGP)

Plains GP (NYSE:PAGP) and Mesa Royalty Trust (NYSE:MTR) are both energy companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares Plains GP and Mesa Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Plains GP	0.21%	0.70%	0.36%
Mesa Royalty Trust	60.59%	9.17%	8.82%

Earnings & Valuation

This table compares Plains GP and Mesa Royalty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Plains GP	$52.30 billion	0.10	$103.00 million	$2.22	11.67
Mesa Royalty Trust	$600,000.00	6.31	$510,000.00	$0.16	12.71

Plains GP has higher revenue and earnings than Mesa Royalty Trust. Plains GP is trading at a lower price-to-earnings ratio than Mesa Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Plains GP and Mesa Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Plains GP	2	6	5	1	2.36
Mesa Royalty Trust	1	0	0	0	1.00

Plains GP presently has a consensus price target of $26.25, indicating a potential upside of 1.31%. Given Plains GP’s stronger consensus rating and higher possible upside, research analysts clearly believe Plains GP is more favorable than Mesa Royalty Trust.

Institutional and Insider Ownership

88.3% of Plains GP shares are owned by institutional investors. Comparatively, 12.7% of Mesa Royalty Trust shares are owned by institutional investors. 6.9% of Plains GP shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Plains GP has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Mesa Royalty Trust has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Summary

Plains GP beats Mesa Royalty Trust on 11 of the 15 factors compared between the two stocks.

About Plains GP

Plains GP Holdings is a publicly traded holding company whose primary business is its ownership interest in Plains All American Pipeline. Through that relationship, it is tied to a midstream energy business focused on transporting, storing, gathering and marketing crude oil and natural gas liquids. Plains All American Pipeline operates pipelines, storage facilities and other logistics infrastructure that connect energy producers with refineries and other customers. Its operations span the United States and Canada, serving key crude oil and natural gas liquids markets.

About Mesa Royalty Trust

Mesa Royalty Trust (NYSE:MTR) is a publicly traded grantor trust that holds royalty and net profits interests in certain oil and natural gas properties in the United States. The trust does not conduct exploration, drilling, or production operations itself; instead, it receives distributions based on the proceeds generated by the underlying properties after allowable operating and production expenses. The trust’s interests are primarily associated with producing properties in the Hugoton Field of southwestern Kansas and the Anadarko Basin of Texas and Oklahoma.