Comparing Cactus (NYSE:WHD) & PermRock Royalty Trust (NYSE:PRT)

Cactus (NYSE:WHD) and PermRock Royalty Trust (NYSE:PRT) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Volatility and Risk

Cactus has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500. Comparatively, PermRock Royalty Trust has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cactus 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
Cactus	$1.13 billion	2.86	$185.41 million	$2.65	15.27
PermRock Royalty Trust	$6.02 million	7.70	$5.16 million	$0.44	8.66

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	2	1	2	0	2.00
PermRock Royalty Trust	0	0	0	0	0.00

Cactus presently has a consensus price target of $50.75, indicating a potential upside of 25.43%. Given Cactus’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Cactus is more favorable than PermRock Royalty Trust.

Dividends

Cactus pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. PermRock Royalty Trust pays an annual dividend of $0.33 per share and has a dividend yield of 8.7%. Cactus pays out 21.1% of its earnings in the form of a dividend. PermRock Royalty Trust pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cactus has increased its dividend for 4 consecutive years.

Institutional and Insider Ownership

85.1% of Cactus shares are owned by institutional investors. Comparatively, 41.7% of PermRock Royalty Trust shares are owned by institutional investors. 16.8% of Cactus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cactus	16.19%	17.34%	12.69%
PermRock Royalty Trust	84.81%	7.46%	7.31%

Summary

Cactus beats PermRock Royalty Trust on 14 of the 17 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

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.