Black Stone Minerals, L.P. (NYSE: BSM) and EXCO Resources NL (NYSE:XCO) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Black Stone Minerals, L.P. and EXCO Resources NL, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Stone Minerals, L.P. 0 1 3 0 2.75
EXCO Resources NL 0 0 0 0 N/A

Black Stone Minerals, L.P. presently has a consensus target price of $18.50, suggesting a potential upside of 6.69%. Given Black Stone Minerals, L.P.’s higher probable upside, analysts clearly believe Black Stone Minerals, L.P. is more favorable than EXCO Resources NL.

Valuation & Earnings

This table compares Black Stone Minerals, L.P. and EXCO Resources NL’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Black Stone Minerals, L.P. $332.04 million 10.24 $267.20 million $0.83 20.89
EXCO Resources NL $303.66 million 0.09 $104.21 million $7.42 0.18

Black Stone Minerals, L.P. has higher revenue and earnings than EXCO Resources NL. EXCO Resources NL 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.

Profitability

This table compares Black Stone Minerals, L.P. and EXCO Resources NL’s 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%
EXCO Resources NL 47.81% N/A -2.58%

Insider & Institutional Ownership

21.4% of Black Stone Minerals, L.P. shares are held by institutional investors. Comparatively, 56.7% of EXCO Resources NL shares are held by institutional investors. 25.0% of Black Stone Minerals, L.P. shares are held by company insiders. Comparatively, 2.0% of EXCO Resources NL shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Black Stone Minerals, L.P. pays an annual dividend of $1.25 per share and has a dividend yield of 7.2%. EXCO Resources NL 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. Black Stone Minerals, L.P. has increased its dividend for 4 consecutive years.

Risk and Volatility

Black Stone Minerals, L.P. has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500. Comparatively, EXCO Resources NL has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Summary

Black Stone Minerals, L.P. beats EXCO Resources NL on 11 of the 16 factors compared between the two stocks.

Black Stone Minerals, L.P. Company Profile

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.

EXCO Resources NL Company Profile

EXCO Resources, Inc. (EXCO) is an oil and natural gas company. The Company is engaged in the exploration, exploitation, acquisition, development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The Company’s principal operations are conducted in certain United States oil and natural gas areas, including Texas, Louisiana and the Appalachia region. The Company holds acreage positions in approximately three shale plays in the United States, including East Texas and North Louisiana, South Texas and Appalachia. In East Texas and North Louisiana, the Company holds approximately 83,800 net acres in the Haynesville and Bossier shales. In South Texas, it holds approximately 65,800 net acres in the Eagle Ford shale. In Appalachia, the Company holds approximately 137,400 net acres prospective in the Marcellus shale.

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