Vermilion Energy (NYSE:VET) vs. PermRock Royalty Trust (NYSE:PRT) Critical Analysis

Vermilion Energy (NYSE:VET) and PermRock Royalty Trust (NYSE:PRT) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Valuation and Earnings

This table compares Vermilion Energy and PermRock Royalty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vermilion Energy	$2.14 billion	0.76	-$176.01 million	($2.78)	-3.71
PermRock Royalty Trust	$6.20 million	7.65	$6.26 million	$0.42	9.29

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

Institutional and Insider Ownership

31.9% of Vermilion Energy shares are owned by institutional investors. Comparatively, 41.7% of PermRock Royalty Trust shares are owned by institutional investors. 2.6% of Vermilion Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vermilion Energy	-41.33%	5.99%	2.94%
PermRock Royalty Trust	85.38%	6.99%	6.86%

Volatility and Risk

Vermilion Energy has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500. Comparatively, PermRock Royalty Trust has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vermilion Energy and PermRock Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vermilion Energy	0	1	2	0	2.67
PermRock Royalty Trust	0	0	0	0	N/A

Dividends

Vermilion Energy pays an annual dividend of $0.35 per share and has a dividend yield of 3.4%. PermRock Royalty Trust pays an annual dividend of $0.36 per share and has a dividend yield of 9.2%. Vermilion Energy pays out -12.6% of its earnings in the form of a dividend. PermRock Royalty Trust pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

PermRock Royalty Trust beats Vermilion Energy on 9 of the 14 factors compared between the two stocks.

About Vermilion Energy

Vermilion Energy Inc., together with its subsidiaries, engages in the acquisition, exploration, development, and production of petroleum and natural gas. The company has properties in West Central Alberta, southeast Saskatchewan, Manitoba, and West Pembina in Canada; Wyoming in the United States; southwest Bordeaux and Paris Basin in France; the Netherlands; Germany; Ireland; Croatia; Slovakia; and Australia. The company was founded in 1994 and is headquartered in Calgary, Canada.

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.