Critical Review: Sabine Royalty Trust (SBR) and Its Rivals

Profitability

This table compares Sabine Royalty Trust and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabine Royalty Trust	95.36%	904.22%	855.71%
Sabine Royalty Trust Competitors	57.68%	1,199.90%	167.41%

Risk and Volatility

Sabine Royalty Trust has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Sabine Royalty Trust’s peers have a beta of 0.33, suggesting that their average stock price is 67% less volatile than the S&P 500.

Institutional & Insider Ownership

15.8% of Sabine Royalty Trust shares are held by institutional investors. Comparatively, 30.4% of shares of all “OIL – US RYLTY TR” companies are held by institutional investors. 5.0% of shares of all “OIL – US RYLTY TR” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Sabine Royalty Trust and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sabine Royalty Trust	$83.17 million	$79.64 million	12.47
Sabine Royalty Trust Competitors	$82.64 million	$18.27 million	25.92

Sabine Royalty Trust has higher revenue and earnings than its peers. Sabine Royalty Trust is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Sabine Royalty Trust pays an annual dividend of $5.12 per share and has a dividend yield of 7.7%. Sabine Royalty Trust pays out 96.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “OIL – US RYLTY TR” companies pay a dividend yield of 9.1% and pay out 133.4% of their earnings in the form of a dividend.

Summary

Sabine Royalty Trust peers beat Sabine Royalty Trust on 6 of the 11 factors compared.

About Sabine Royalty Trust

Sabine Royalty Trust holds royalty and mineral interests in various producing oil and gas properties in the United States. Its royalty and mineral interests include landowner's royalties, overriding royalty interests, minerals, production payments, and other similar non-participatory interest in certain producing and proved undeveloped oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. Sabine Royalty Trust was founded in 1982 and is based in Dallas, Texas.