Comparing Permian Basin Royalty Trust (NYSE:PBT) & Suncor Energy (NYSE:SU)

Suncor Energy (NYSE:SU) and Permian Basin Royalty Trust (NYSE:PBT) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

Suncor Energy has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Permian Basin Royalty Trust has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Dividends

Suncor Energy pays an annual dividend of $1.73 per share and has a dividend yield of 2.2%. Permian Basin Royalty Trust pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Suncor Energy pays out 31.9% of its earnings in the form of a dividend. Permian Basin Royalty Trust pays out 68.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Suncor Energy has increased its dividend for 4 consecutive years. Suncor Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Suncor Energy and Permian Basin Royalty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suncor Energy	0	1	7	3	3.18
Permian Basin Royalty Trust	0	1	0	0	2.00

Suncor Energy presently has a consensus price target of $79.62, suggesting a potential upside of 0.16%. Given Suncor Energy’s stronger consensus rating and higher possible upside, equities analysts plainly believe Suncor Energy is more favorable than Permian Basin Royalty Trust.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suncor Energy	$35.29 billion	2.63	$4.24 billion	$5.43	14.64
Permian Basin Royalty Trust	$16.13 million	96.96	$14.30 million	$0.35	95.87

Suncor Energy has higher revenue and earnings than Permian Basin Royalty Trust. Suncor Energy 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.

Insider & Institutional Ownership

67.4% of Suncor Energy shares are owned by institutional investors. Comparatively, 28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. 1.0% of Suncor Energy shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Suncor Energy	15.62%	20.05%	10.06%
Permian Basin Royalty Trust	91.96%	9,990.08%	510.19%

Summary

Suncor Energy beats Permian Basin Royalty Trust on 12 of the 18 factors compared between the two stocks.

About Suncor Energy

Suncor Energy Inc. operates as an integrated energy company in Canada, the United States, and internationally. It operates through Oil Sands; Exploration and Production; and Refining and Marketing segments. The Oil Sands segment explores, develops, and produces bitumen, synthetic crude oil, and related products. This segment also engages in oil sands mining. The Exploration and Production segment is involved in offshore operations in the East Coast of Canada; and marketing and risk management of crude oil and natural gas. The Refining and Marketing segment engages in the refining of crude oil products; and distribution, marketing, transportation, and risk management of refined and petrochemical products, and other purchased products through the retail and wholesale networks. This segment is also involved in the trading of crude oil, refined products, natural gas, and power. The company was formerly known as Suncor Inc. and changed its name to Suncor Energy Inc. in April 1997. Suncor Energy Inc. was founded in 1917 and is headquartered in Calgary, Canada. Suncor Energy Inc.

About Permian Basin Royalty Trust

Permian Basin Royalty Trust, an express trust, holds royalty interests in various oil and gas properties in the United States. The company holds a 75% net overriding royalty interest in the Waddell Ranch properties, including Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell fields in Crane County, Texas. It also holds a 95% net overriding royalty in the Texas Royalty properties, which consist of various producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole, and others located in Texas. Its Texas Royalty properties comprise approximately 125 separate royalty interests containing approximately 51,000 net producing acres. The company was founded in 1980 and is based in Dallas, Texas.