Comparing PermRock Royalty Trust (NYSE:PRT) and Antero Midstream (NYSE:AM)

PermRock Royalty Trust (NYSE:PRT) and Antero Midstream (NYSE:AM) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Risk and Volatility

PermRock Royalty Trust has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Antero Midstream has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Dividends

PermRock Royalty Trust pays an annual dividend of $0.37 per share and has a dividend yield of 9.5%. Antero Midstream pays an annual dividend of $0.90 per share and has a dividend yield of 5.0%. PermRock Royalty Trust pays out 84.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PermRock Royalty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares PermRock Royalty Trust and Antero Midstream”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PermRock Royalty Trust	$6.02 million	7.90	$5.16 million	$0.44	8.89
Antero Midstream	$1.11 billion	7.82	$400.89 million	$0.95	19.03

Antero Midstream has higher revenue and earnings than PermRock Royalty Trust. PermRock Royalty Trust is trading at a lower price-to-earnings ratio than Antero Midstream, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

41.7% of PermRock Royalty Trust shares are owned by institutional investors. Comparatively, 54.0% of Antero Midstream shares are owned by institutional investors. 0.9% of Antero Midstream shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for PermRock Royalty Trust and Antero Midstream, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PermRock Royalty Trust	0	0	0	0	0.00
Antero Midstream	1	3	0	1	2.20

Antero Midstream has a consensus target price of $18.50, indicating a potential upside of 2.32%. Given Antero Midstream’s stronger consensus rating and higher possible upside, analysts clearly believe Antero Midstream is more favorable than PermRock Royalty Trust.

Profitability

This table compares PermRock Royalty Trust and Antero Midstream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PermRock Royalty Trust	84.81%	7.46%	7.31%
Antero Midstream	39.53%	21.67%	7.93%

Summary

Antero Midstream beats PermRock Royalty Trust on 11 of the 16 factors compared between the two stocks.

About PermRock Royalty Trust

PermRock Royalty Trust operates as a statutory trust. It owns interests in the oil and natural gas producing properties. The company's underlying properties include 22,394 net acres in the Permian Basin. The company was founded in 2017 and is based in Dallas, Texas.

About Antero Midstream

Antero Midstream Corporation owns, operates, and develops midstream energy assets in the Appalachian Basin. It operates in two segments, Gathering and Processing, and Water Handling. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources' wells in West Virginia and Ohio. The Water Handling segment delivers fresh water from sources, including the Ohio River, local reservoirs, and various regional waterways; uses water handling systems to transport flowback and produced water; and offers pumping stations, water storage, and blending facilities. The company was founded in 2002 and is headquartered in Denver, Colorado.