Critical Analysis: Green Plains (NASDAQ:GPRE) versus Cross Timbers Royalty Trust (NYSE:CRT)

Cross Timbers Royalty Trust (NYSE:CRT) and Green Plains (NASDAQ:GPRE) are both small-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for Cross Timbers Royalty Trust and Green Plains, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cross Timbers Royalty Trust	0	1	0	0	2.00
Green Plains	0	5	2	0	2.29

Green Plains has a consensus price target of $17.00, indicating a potential upside of 16.29%. Given Green Plains’ stronger consensus rating and higher possible upside, analysts clearly believe Green Plains is more favorable than Cross Timbers Royalty Trust.

Volatility & Risk

Cross Timbers Royalty Trust has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500. Comparatively, Green Plains has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Insider and Institutional Ownership

9.7% of Cross Timbers Royalty Trust shares are held by institutional investors. 9.4% of Cross Timbers Royalty Trust shares are held by company insiders. Comparatively, 1.4% of Green Plains shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Cross Timbers Royalty Trust and Green Plains”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cross Timbers Royalty Trust	$4.25 million	18.17	$6.15 million	$0.53	24.30
Green Plains	$1.83 billion	0.56	-$121.28 million	$1.59	9.19

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

Profitability

This table compares Cross Timbers Royalty Trust and Green Plains’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cross Timbers Royalty Trust	74.04%	147.68%	81.96%
Green Plains	6.78%	14.52%	7.33%

Dividends

Cross Timbers Royalty Trust pays an annual dividend of $0.77 per share and has a dividend yield of 6.0%. Green Plains pays an annual dividend of $0.48 per share and has a dividend yield of 3.3%. Cross Timbers Royalty Trust pays out 145.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Green Plains pays out 30.2% of its earnings in the form of a dividend.

Summary

Cross Timbers Royalty Trust beats Green Plains on 9 of the 16 factors compared between the two stocks.

About Cross Timbers Royalty Trust

Cross Timbers Royalty Trust operates as an express trust in the United States. It holds 90% net profits interests in certain producing and nonproducing royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico; and 75% net profits working interest in four properties in Texas and three properties in Oklahoma. The company was founded in 1991 and is based in Dallas, Texas.

About Green Plains

Green Plains Inc. produces low-carbon fuels in the United States and internationally. It operates through three segments: Ethanol Production, Agribusiness and Energy Services, and Partnership. The Ethanol Production segment produces ethanol, distillers grains, and ultra-high protein and renewable corn oil. The Agribusiness and Energy Services segment engages in the grain procurement, handling and storage, commodity marketing business; and trading of ethanol, distiller grains, renewable corn oil, grain, natural gas, and other commodities in various markets. This segment also provides grain drying and storage services to grain producers. The Partnership segment offers fuel storage and transportation services. It operates 24 ethanol storage facilities; two fuel terminal facilities; and a fleet of approximately 2,180 leased railcars. The company was formerly known as Green Plains Renewable Energy, Inc. and changed its name to Green Plains Inc. in May 2014. Green Plains Inc. was incorporated in 2004 and is headquartered in Omaha, Nebraska.