Critical Analysis: EQT (NYSE:EQT) and Permian Resources (NYSE:PR)

Permian Resources (NYSE:PR) and EQT (NYSE:EQT) are both large-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Resources	0	2	12	4	3.11
EQT	0	5	19	3	2.93

Permian Resources presently has a consensus price target of $21.43, indicating a potential upside of 1.15%. EQT has a consensus price target of $68.00, indicating a potential upside of 14.03%. Given EQT’s higher probable upside, analysts plainly believe EQT is more favorable than Permian Resources.

Institutional & Insider Ownership

91.8% of Permian Resources shares are held by institutional investors. Comparatively, 90.8% of EQT shares are held by institutional investors. 6.4% of Permian Resources shares are held by company insiders. Comparatively, 0.7% of EQT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Permian Resources has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, EQT has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Dividends

Permian Resources pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. EQT pays an annual dividend of $0.66 per share and has a dividend yield of 1.1%. Permian Resources pays out 51.2% of its earnings in the form of a dividend. EQT pays out 19.9% 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. Permian Resources has increased its dividend for 1 consecutive years and EQT has increased its dividend for 3 consecutive years.

Earnings & Valuation

This table compares Permian Resources and EQT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Resources	$5.07 billion	3.50	$935.17 million	$1.25	16.95
EQT	$8.64 billion	4.31	$2.04 billion	$3.31	18.02

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

Profitability

This table compares Permian Resources and EQT’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%
EQT	23.59%	7.25%	4.63%

Summary

EQT beats Permian Resources on 11 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 EQT

EQT Corporation operates as a natural gas production company in the United States. The company sells natural gas and natural gas liquids to marketers, utilities, and industrial customers through pipelines located in the Appalachian Basin. It also offers marketing services and contractual pipeline capacity management services. The company was formerly known as Equitable Resources Inc. and changed its name to EQT Corporation in February 2009. EQT Corporation was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania.