Cactus (NYSE:WHD) vs. LandBridge (NYSE:LB) Critical Comparison

LandBridge (NYSE:LB) and Cactus (NYSE:WHD) are both mid-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Insider and Institutional Ownership

85.1% of Cactus shares are owned by institutional investors. 70.4% of LandBridge shares are owned by company insiders. Comparatively, 16.8% of Cactus shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

LandBridge pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Cactus pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. LandBridge pays out 11.2% of its earnings in the form of a dividend. Cactus pays out 18.5% 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. Cactus has raised its dividend for 4 consecutive years. Cactus is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares LandBridge and Cactus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LandBridge	N/A	N/A	N/A
Cactus	16.78%	18.99%	13.76%

Analyst Ratings

This is a summary of current recommendations and price targets for LandBridge and Cactus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LandBridge	1	3	6	0	2.50
Cactus	1	1	2	0	2.25

LandBridge currently has a consensus target price of $59.11, suggesting a potential upside of 12.73%. Cactus has a consensus target price of $52.00, suggesting a potential upside of 17.02%. Given Cactus’ higher possible upside, analysts plainly believe Cactus is more favorable than LandBridge.

Valuation & Earnings

This table compares LandBridge and Cactus”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LandBridge	$109.95 million	36.44	-$41.77 million	$3.56	14.73
Cactus	$1.13 billion	3.14	$185.41 million	$2.81	15.81

Cactus has higher revenue and earnings than LandBridge. LandBridge is trading at a lower price-to-earnings ratio than Cactus, indicating that it is currently the more affordable of the two stocks.

Summary

Cactus beats LandBridge on 10 of the 16 factors compared between the two stocks.

About LandBridge

LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States. It owns surface acres in and around the Delaware Basin in Texas and New Mexico. The company holds a portfolio of oil and gas royalties. It also sells brackish water and other surface composite materials. The company was founded in 2021 and is based in Houston, Texas. LandBridge Company LLC operates as a subsidiary of LandBridge Holdings LLC.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.