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

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

Risk and Volatility

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

Earnings and Valuation

This table compares Permian Basin Royalty Trust and SFL”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Basin Royalty Trust	$16.13 million	83.80	$14.30 million	$0.35	82.86
SFL	$733.04 million	2.16	-$26.43 million	$0.67	16.35

Permian Basin Royalty Trust has higher earnings, but lower revenue 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

Permian Basin Royalty Trust pays an annual dividend of $0.54 per share and has a dividend yield of 1.9%. SFL pays an annual dividend of $0.88 per share and has a dividend yield of 8.0%. 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 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. 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Permian Basin Royalty Trust and SFL, as reported by MarketBeat.

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

SFL has a consensus price target of $14.00, suggesting a potential upside of 27.80%. Given SFL’s stronger consensus rating and higher possible upside, analysts clearly believe SFL is more favorable than Permian Basin Royalty Trust.

Insider and Institutional Ownership

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Permian Basin Royalty Trust	91.96%	9,990.08%	510.19%
SFL	8.76%	3.41%	0.92%

Summary

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

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.

About SFL

SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company operates in various sectors of the maritime, and shipping and offshore industries, including oil transportation, dry bulk shipments, chemical transportation, oil products transportation, container transportation, car transportation, and drilling rigs. As of December 31, 2023, the company owned seven crude oil carriers, six oil product tankers, 15 dry bulk carriers, 32 container vessels, one jack-up drilling rig, one ultra-deepwater drilling rig, and five car carriers. It primarily operates in Bermuda, Canada, Cyprus, Liberia, Namibia, Norway, Singapore, the United Kingdom, and the Marshall Islands. The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd. in September 2019. SFL Corporation Ltd. was founded in 2003 and is based in Hamilton, Bermuda.