Head-To-Head Analysis: Northern Oil and Gas (NYSE:NOG) & Freehold Royalties (OTCMKTS:FRHLF)

Northern Oil and Gas (NYSE:NOG) and Freehold Royalties (OTCMKTS:FRHLF) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Valuation and Earnings

This table compares Northern Oil and Gas and Freehold Royalties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Oil and Gas	$2.48 billion	1.07	$38.76 million	($5.18)	-4.79
Freehold Royalties	$224.34 million	8.68	$65.69 million	$0.61	19.47

Freehold Royalties has lower revenue, but higher earnings than Northern Oil and Gas. Northern Oil and Gas is trading at a lower price-to-earnings ratio than Freehold Royalties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Northern Oil and Gas and Freehold Royalties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northern Oil and Gas	-25.35%	18.69%	6.85%
Freehold Royalties	43.59%	13.90%	10.09%

Dividends

Northern Oil and Gas pays an annual dividend of $1.80 per share and has a dividend yield of 7.3%. Freehold Royalties pays an annual dividend of $0.78 per share and has a dividend yield of 6.6%. Northern Oil and Gas pays out -34.7% of its earnings in the form of a dividend. Freehold Royalties pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northern Oil and Gas has increased its dividend for 4 consecutive years. Northern Oil and Gas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Northern Oil and Gas and Freehold Royalties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Oil and Gas	2	4	3	0	2.11
Freehold Royalties	0	5	0	0	2.00

Northern Oil and Gas currently has a consensus target price of $31.00, suggesting a potential upside of 25.02%. Given Northern Oil and Gas’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Northern Oil and Gas is more favorable than Freehold Royalties.

Institutional and Insider Ownership

98.8% of Northern Oil and Gas shares are owned by institutional investors. 2.8% of Northern Oil and Gas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Northern Oil and Gas beats Freehold Royalties on 10 of the 16 factors compared between the two stocks.

About Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.

About Freehold Royalties

Freehold Royalties Ltd. engages in the acquiring and managing royalty interests in the crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. Freehold Royalties Ltd. was founded in 1996 and is headquartered in Calgary, Canada.