MV Oil Trust (NYSE:MVO) & Sabine Royalty Trust (NYSE:SBR) Critical Review

Sabine Royalty Trust (NYSE:SBR) and MV Oil Trust (NYSE:MVO) are both small-cap energy companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Dividends

Sabine Royalty Trust pays an annual dividend of $4.42 per share and has a dividend yield of 6.2%. MV Oil Trust pays an annual dividend of $0.82 per share and has a dividend yield of 17.5%. Sabine Royalty Trust pays out 87.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MV Oil Trust pays out 65.1% of its earnings in the form of a dividend. MV Oil Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

15.8% of Sabine Royalty Trust shares are owned by institutional investors. Comparatively, 3.5% of MV Oil Trust shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Sabine Royalty Trust and MV Oil Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sabine Royalty Trust	$77.18 million	13.57	$79.64 million	$5.04	14.25
MV Oil Trust	$18.58 million	2.89	$17.65 million	$1.26	3.71

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sabine Royalty Trust and MV Oil Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sabine Royalty Trust	0	1	0	0	2.00
MV Oil Trust	1	0	0	0	1.00

Profitability

This table compares Sabine Royalty Trust and MV Oil Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabine Royalty Trust	94.85%	866.81%	819.46%
MV Oil Trust	93.90%	N/A	401.81%

Volatility & Risk

Sabine Royalty Trust has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, MV Oil Trust has a beta of -0.11, suggesting that its stock price is 111% less volatile than the S&P 500.

Summary

Sabine Royalty Trust beats MV Oil Trust on 11 of the 13 factors compared between the two stocks.

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.

About MV Oil Trust

MV Oil Trust acquires and holds term net profits interests in the oil and natural gas properties of MV Partners, LLC. Its properties wells located in the Mid-Continent region in the states of Kansas and Colorado. MV Oil Trust was incorporated in 2006 and is based in Houston, Texas.