DT Midstream (NYSE:DTM) and PermRock Royalty Trust (NYSE:PRT) Head-To-Head Review

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

Institutional & Insider Ownership

81.5% of DT Midstream shares are owned by institutional investors. Comparatively, 41.7% of PermRock Royalty Trust shares are owned by institutional investors. 0.3% of DT Midstream shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for DT Midstream and PermRock Royalty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DT Midstream	2	4	6	0	2.33
PermRock Royalty Trust	0	0	0	0	0.00

DT Midstream presently has a consensus target price of $110.67, suggesting a potential upside of 6.15%. Given DT Midstream’s stronger consensus rating and higher possible upside, research analysts plainly believe DT Midstream is more favorable than PermRock Royalty Trust.

Earnings & Valuation

This table compares DT Midstream and PermRock Royalty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DT Midstream	$981.00 million	10.80	$354.00 million	$3.73	27.95
PermRock Royalty Trust	$6.02 million	8.10	$5.16 million	$0.44	9.10

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DT Midstream	33.90%	8.48%	4.13%
PermRock Royalty Trust	84.81%	7.46%	7.31%

Dividends

DT Midstream pays an annual dividend of $3.28 per share and has a dividend yield of 3.1%. PermRock Royalty Trust pays an annual dividend of $0.33 per share and has a dividend yield of 8.2%. DT Midstream pays out 87.9% 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 pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DT Midstream has raised its dividend for 2 consecutive years. PermRock Royalty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

DT Midstream has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, PermRock Royalty Trust has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Summary

DT Midstream beats PermRock Royalty Trust on 12 of the 17 factors compared between the two stocks.

About DT Midstream

DT Midstream, Inc., together with its subsidiaries, provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. The Pipeline segment owns and operates interstate and intrastate natural gas pipelines, storage systems, and natural gas gathering lateral pipelines. This segment also engages in the transportation and storage of natural gas for intermediate and end-user customers. The Gathering segment owns and operates gas gathering systems. This segment is involved in the collection of natural gas for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines for transportation; and provision of associated ancillary services, including compression, dehydration, gas treatment, water impoundment, water transportation, water disposal, and sand mining. It serves natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. The company was incorporated in 2021 and is headquartered in Detroit, Michigan.

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.