Texas Pacific Land (NYSE:TPL – Get Free Report) and W&T Offshore (NYSE:WTI – Get Free Report) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.
Institutional & Insider Ownership
59.9% of Texas Pacific Land shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 0.3% of Texas Pacific Land shares are held by company insiders. Comparatively, 35.9% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Texas Pacific Land and W&T Offshore’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Pacific Land | 60.71% | 36.22% | 32.54% |
| W&T Offshore | -8.44% | N/A | -1.72% |
Earnings and Valuation
This table compares Texas Pacific Land and W&T Offshore”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Pacific Land | $798.19 million | 24.30 | $481.38 million | $8.51 | 33.05 |
| W&T Offshore | $501.46 million | 1.03 | -$150.06 million | ($0.34) | -9.81 |
Texas Pacific Land has higher revenue and earnings than W&T Offshore. W&T Offshore is trading at a lower price-to-earnings ratio than Texas Pacific Land, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Texas Pacific Land and W&T Offshore, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Pacific Land | 0 | 2 | 1 | 0 | 2.33 |
| W&T Offshore | 1 | 0 | 1 | 1 | 2.67 |
Texas Pacific Land presently has a consensus target price of $639.00, suggesting a potential upside of 127.18%. W&T Offshore has a consensus target price of $4.25, suggesting a potential upside of 27.44%. Given Texas Pacific Land’s higher probable upside, equities analysts plainly believe Texas Pacific Land is more favorable than W&T Offshore.
Dividends
Texas Pacific Land pays an annual dividend of $2.40 per share and has a dividend yield of 0.9%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.2%. Texas Pacific Land pays out 28.2% of its earnings in the form of a dividend. W&T Offshore pays out -11.8% 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. Texas Pacific Land has raised its dividend for 3 consecutive years. W&T Offshore is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Texas Pacific Land has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.
Summary
Texas Pacific Land beats W&T Offshore on 12 of the 17 factors compared between the two stocks.
About Texas Pacific Land
Texas Pacific Land Corporation is a land and resource management company focused on properties in West Texas, particularly the Permian Basin. Its roots date to the Texas and Pacific Railway, and the company’s land holdings were historically managed through the Texas Pacific Land Trust before it became a corporation. The company earns revenue from oil and natural gas royalties and from activities tied to its surface and mineral interests. Its land and resource management operations include leasing land, granting easements and rights-of-way, and supporting energy development and other land uses.
About W&T Offshore
W&T Offshore, Inc. is an independent oil and natural gas company focused on exploring for, developing, acquiring and producing energy resources in the Gulf of Mexico. Its operations include offshore properties in both shallow-water and deepwater areas. The company’s production includes crude oil, natural gas and natural gas liquids. W&T Offshore holds interests in offshore leases and related infrastructure, supporting its exploration and production activities. Founded in 1983 by Tracy W. Krohn, the company is headquartered in Houston, Texas.
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