Critical Review: Texas Pacific Land Trust (TPL) and Jones Energy (JONE)

Texas Pacific Land Trust (NYSE: TPL) and Jones Energy (NYSE:JONE) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Texas Pacific Land Trust and Jones Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Pacific Land Trust 0 0 0 0 N/A
Jones Energy 2 3 1 0 1.83

Jones Energy has a consensus target price of $1.90, indicating a potential upside of 71.17%. Given Jones Energy’s higher probable upside, analysts clearly believe Jones Energy is more favorable than Texas Pacific Land Trust.

Dividends

Texas Pacific Land Trust pays an annual dividend of $0.35 per share and has a dividend yield of 0.1%. Jones Energy does not pay a dividend. Texas Pacific Land Trust pays out 3.6% of its earnings in the form of a dividend. Texas Pacific Land Trust has raised its dividend for 6 consecutive years.

Profitability

This table compares Texas Pacific Land Trust and Jones Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Pacific Land Trust 63.97% 152.03% 91.85%
Jones Energy -105.90% -0.80% -0.35%

Volatility & Risk

Texas Pacific Land Trust has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Jones Energy has a beta of 2.57, meaning that its share price is 157% more volatile than the S&P 500.

Valuation and Earnings

This table compares Texas Pacific Land Trust and Jones Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Texas Pacific Land Trust $132.41 million 28.75 $76.36 million $9.71 50.01
Jones Energy $127.85 million 0.85 -$42.55 million ($2.65) -0.42

Texas Pacific Land Trust has higher revenue and earnings than Jones Energy. Jones Energy is trading at a lower price-to-earnings ratio than Texas Pacific Land Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

39.7% of Texas Pacific Land Trust shares are held by institutional investors. Comparatively, 58.9% of Jones Energy shares are held by institutional investors. 0.9% of Texas Pacific Land Trust shares are held by company insiders. Comparatively, 37.2% of Jones Energy shares are held by company insiders. 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.

Summary

Texas Pacific Land Trust beats Jones Energy on 10 of the 16 factors compared between the two stocks.

Texas Pacific Land Trust Company Profile

Texas Pacific Land Trust (the Trust) is engaged in managing land, including royalty interests, for the benefit of its owners. The Company operates through managing the land segment, which includes sales and leases of such land, and the retention of oil and gas royalties. The Trust derives revenue from all avenues of managing the land, such as oil and gas royalties, grazing leases, easements, sundry and specialty leases, and land sales. The Trust has a perpetual oil and gas royalty interest in 459,200 acres. As of December 31, 2016, the Trust owned the surface estate in approximately 887,553 acres of land, consisting of numerous separate tracts, located in 18 counties in the western part of Texas. As of December 31, 2016, the Trust also owned a 1/128 nonparticipating perpetual oil and gas royalty interest under 85,414 acres of land and a 1/16 nonparticipating perpetual oil and gas royalty interest under 373,777 acres of land in the western part of Texas.

Jones Energy Company Profile

Jones Energy, Inc. is an independent oil and gas company engaged in the exploration, development, production and acquisition of oil and natural gas properties. The Company’s assets are located within the Anadarko and Arkoma basins of Texas and Oklahoma. It owns leasehold interests in oil and natural gas producing properties, as well as in undeveloped acreage, located in the Anadarko and Arkoma basins in Texas and Oklahoma. The Company’s oil is generally sold under short-term, extendable and cancellable agreements with unaffiliated purchasers. The Company’s natural gas is sold at delivery points at or near producing wells to natural gas gathering and marketing companies. Its total estimated proved reserves are approximately 101.7 million barrels of oil equivalent (MMBoe). Approximately 25% of its total estimated proved reserves consist of oil, over 32% consist of natural gas liquids (NGLs) and over 43% consist of natural gas. Its properties include over 1,020 gross producing wells.

Receive News & Ratings for Texas Pacific Land Trust Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Texas Pacific Land Trust and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply