Head-To-Head Analysis: Black Stone Minerals (NYSE:BSM) and China Shenhua Energy (OTCMKTS:CSUAY)

China Shenhua Energy (OTCMKTS:CSUAY) and Black Stone Minerals (NYSE:BSM) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Dividends

China Shenhua Energy pays an annual dividend of $0.91 per share and has a dividend yield of 4.2%. Black Stone Minerals pays an annual dividend of $1.28 per share and has a dividend yield of 9.2%. China Shenhua Energy pays out 55.2% of its earnings in the form of a dividend. Black Stone Minerals pays out 125.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations and price targets for China Shenhua Energy and Black Stone Minerals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Shenhua Energy	0	1	0	0	2.00
Black Stone Minerals	1	3	0	0	1.75

Black Stone Minerals has a consensus target price of $15.00, suggesting a potential upside of 7.79%. Given Black Stone Minerals’ higher possible upside, analysts plainly believe Black Stone Minerals is more favorable than China Shenhua Energy.

Profitability

This table compares China Shenhua Energy and Black Stone Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Shenhua Energy	15.92%	11.40%	7.77%
Black Stone Minerals	57.23%	36.99%	21.91%

Valuation and Earnings

This table compares China Shenhua Energy and Black Stone Minerals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Shenhua Energy	$41.03 billion	2.65	$7.54 billion	$1.65	13.26
Black Stone Minerals	$469.92 million	6.30	$299.93 million	$1.02	13.64

China Shenhua Energy has higher revenue and earnings than Black Stone Minerals. China Shenhua Energy is trading at a lower price-to-earnings ratio than Black Stone Minerals, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

China Shenhua Energy has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, Black Stone Minerals has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Insider & Institutional Ownership

14.5% of Black Stone Minerals shares are owned by institutional investors. 17.7% of Black Stone Minerals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Black Stone Minerals beats China Shenhua Energy on 9 of the 15 factors compared between the two stocks.

About China Shenhua Energy

China Shenhua Energy Company Limited, together with its subsidiaries, engages in the production and sale of coal and power; railway, port, and shipping transportation; and coal-to-olefins businesses in the People's Republic of China and internationally. It operates through six segments: Coal, Power Generation, Railway, Port, Shipping, and Coal Chemical. The Coal segment produces coal from surface and underground mines; and sells coal to power plants and metallurgical and coal chemical producers. The Power segment generates electric power through thermal, wind, water, and gas; and sells electric power to power grid companies. The Railway segment provides railway transportation services. The Port segment offers loading, transportation, and storage services. The Shipping segment provides shipment transportation services. The Coal Chemical segment produces and sells methanol; and polyethylene and polypropylene, as well as other by-products. The company was incorporated in 2004 and is based in Beijing, the People's Republic of China. China Shenhua Energy Company Limited operates as a subsidiary of China Energy Investment Corporation Limited.

About Black Stone Minerals

Black Stone Minerals, L.P., together with its subsidiaries, owns and manages oil and natural gas mineral interests. It owns mineral interests in approximately 16.8 million gross acres, nonparticipating royalty interests in 1.8 million gross acres, and overriding royalty interests in 1.6 million gross acres located in 41 states in the United States. The company was founded in 1876 and is based in Houston, Texas.