Comparing Permian Basin Royalty Trust (NYSE:PBT) and Marathon Petroleum (NYSE:MPC)

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

Institutional & Insider Ownership

28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. Comparatively, 76.8% of Marathon Petroleum shares are owned by institutional investors. 0.2% of Marathon Petroleum 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.

Valuation & Earnings

This table compares Permian Basin Royalty Trust and Marathon Petroleum”s gross 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	100.94	$14.30 million	$0.35	99.81
Marathon Petroleum	$135.22 billion	1.00	$4.05 billion	$29.09	15.94

Marathon Petroleum has higher revenue and earnings than Permian Basin Royalty Trust. Marathon Petroleum 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 $0.24 per share and has a dividend yield of 0.7%. Marathon Petroleum pays an annual dividend of $4.00 per share and has a dividend yield of 0.9%. Permian Basin Royalty Trust pays out 68.6% of its earnings in the form of a dividend. Marathon Petroleum pays out 13.8% 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. Marathon Petroleum has raised its dividend for 3 consecutive years. Marathon Petroleum is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Permian Basin Royalty Trust and Marathon Petroleum’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%
Marathon Petroleum	5.48%	31.96%	8.88%

Analyst Recommendations

This is a breakdown of recent recommendations for Permian Basin Royalty Trust and Marathon Petroleum, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Basin Royalty Trust	0	1	0	0	2.00
Marathon Petroleum	0	5	11	1	2.76

Marathon Petroleum has a consensus price target of $379.94, indicating a potential downside of 18.04%. Given Marathon Petroleum’s stronger consensus rating and higher probable upside, analysts clearly believe Marathon Petroleum is more favorable than Permian Basin Royalty Trust.

Volatility and Risk

Permian Basin Royalty Trust has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Summary

Marathon Petroleum beats Permian Basin Royalty Trust on 12 of the 18 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 Marathon Petroleum

Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. The company operates through Refining & Marketing, and Midstream segments. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale and distributes refined products, including renewable diesel, through transportation, storage, distribution, and marketing services. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures propane and petrochemicals. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats, and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. Marathon Petroleum Corporation was founded in 1887 and is headquartered in Findlay, Ohio.