Contrasting Murphy Oil (NYSE:MUR) and Permian Resources (NYSE:PR)

Permian Resources (NYSE:PR) and Murphy Oil (NYSE:MUR) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Dividends

Permian Resources pays an annual dividend of $0.60 per share and has a dividend yield of 3.1%. Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 3.8%. Permian Resources pays out 48.0% of its earnings in the form of a dividend. Murphy Oil pays out 194.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Resources has raised its dividend for 1 consecutive years and Murphy Oil has raised its dividend for 5 consecutive years. Murphy Oil is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Permian Resources and Murphy Oil”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Resources	$5.07 billion	3.17	$935.17 million	$1.25	15.47
Murphy Oil	$2.72 billion	1.93	$104.23 million	$0.72	51.09

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

Volatility and Risk

Permian Resources has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Murphy Oil has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Permian Resources and Murphy Oil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	0	3	12	2	2.94
Murphy Oil	1	13	1	0	2.00

Permian Resources currently has a consensus price target of $20.42, suggesting a potential upside of 5.59%. Murphy Oil has a consensus price target of $31.45, suggesting a potential downside of 14.49%. Given Permian Resources’ stronger consensus rating and higher probable upside, equities analysts plainly believe Permian Resources is more favorable than Murphy Oil.

Profitability

This table compares Permian Resources and Murphy Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Permian Resources	18.46%	10.83%	6.91%
Murphy Oil	3.83%	3.73%	2.01%

Insider and Institutional Ownership

91.8% of Permian Resources shares are held by institutional investors. Comparatively, 78.3% of Murphy Oil shares are held by institutional investors. 12.8% of Permian Resources shares are held by insiders. Comparatively, 6.5% of Murphy Oil shares are held 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

Permian Resources beats Murphy Oil on 14 of the 18 factors compared between the two stocks.

About Permian Resources

Permian Resources Corporation, an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company’s assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, Texas.

About Murphy Oil

Murphy Oil Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company in the United States, Canada, and internationally. It explores for and produces crude oil, natural gas, and natural gas liquids. The company was formerly known as Murphy Corporation and changed its name to Murphy Oil Corporation in 1964. The company was incorporated in 1950 and is headquartered in Houston, Texas.