Black Stone Minerals, L.P. (BSM) and Denbury Resources (DNR) Critical Comparison
Black Stone Minerals, L.P. (NYSE: BSM) and Denbury Resources (NYSE:DNR) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.
This is a summary of recent recommendations for Black Stone Minerals, L.P. and Denbury Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Stone Minerals, L.P.||0||1||2||0||2.67|
Black Stone Minerals, L.P. presently has a consensus target price of $18.33, suggesting a potential upside of 7.53%. Denbury Resources has a consensus target price of $2.43, suggesting a potential upside of 152.14%. Given Denbury Resources’ higher probable upside, analysts clearly believe Denbury Resources is more favorable than Black Stone Minerals, L.P..
This table compares Black Stone Minerals, L.P. and Denbury Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Stone Minerals, L.P.||22.71%||12.67%||7.72%|
Earnings and Valuation
This table compares Black Stone Minerals, L.P. and Denbury Resources’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Black Stone Minerals, L.P.||$332.04 million||10.07||$267.20 million||$0.83||20.54|
|Denbury Resources||$1.04 billion||0.36||$384.51 million||($0.96)||-1.00|
Denbury Resources has higher revenue and earnings than Black Stone Minerals, L.P.. Denbury Resources is trading at a lower price-to-earnings ratio than Black Stone Minerals, L.P., indicating that it is currently the more affordable of the two stocks.
Black Stone Minerals, L.P. pays an annual dividend of $1.25 per share and has a dividend yield of 7.3%. Denbury Resources does not pay a dividend. Black Stone Minerals, L.P. pays out 150.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional and Insider Ownership
21.4% of Black Stone Minerals, L.P. shares are held by institutional investors. Comparatively, 86.5% of Denbury Resources shares are held by institutional investors. 24.3% of Black Stone Minerals, L.P. shares are held by insiders. Comparatively, 1.2% of Denbury Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
Black Stone Minerals, L.P. has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Denbury Resources has a beta of 3.3, indicating that its stock price is 230% more volatile than the S&P 500.
Black Stone Minerals, L.P. beats Denbury Resources on 9 of the 15 factors compared between the two stocks.
About Black Stone Minerals, L.P.
Black Stone Minerals, L.P. is an owner of oil and natural gas mineral interests in the United States. The Company’s principal business is maximizing the value of its existing portfolio of mineral and royalty assets through active management and expanding its asset base through acquisitions of additional mineral and royalty interests. As of December 31, 2016, it owned mineral interests in approximately 15.5 million acres, with an average 45.7% ownership interest in that acreage. As of December 31, 2016, it also owned nonparticipating royalty interests in 1.5 million acres and overriding royalty interests in 1.5 million acres. As of December 31, 2016, these non-cost-bearing interests, which it referred to collectively as its mineral and royalty interests, included ownership in 50,000 producing wells. As of December 31, 2016, its mineral and royalty interests were located in 41 states and in 64 onshore basins in the continental United States.
About Denbury Resources
Denbury Resources Inc. is an independent oil and natural gas company. The Company’s operations are focused in two operating areas: the Gulf Coast and Rocky Mountain regions. Its properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are situated in Montana, North Dakota and Wyoming. It had an estimated proved oil and natural gas reserves of 254.5 million barrels of oil equivalent (MMBOE) as of December 31, 2016. Its primary Gulf Coast carbon dioxide (CO2) source is Jackson Dome, which is located near Jackson, Mississippi. Its mature group of properties includes the initial CO2 field, Little Creek, and other fields, including Brookhaven, Cranfield, Eucutta, Lockhart Crossing, Mallalieu and Soso fields. Its LaBarge Field is located in southwestern Wyoming. Its Riley Ridge Federal Unit is located in southwestern Wyoming and produces gas from the same LaBarge Field.
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