Enduro Royalty Trust (NYSE: NDRO) and SandRidge Mississippian Trust II (NYSE:SDR) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Profitability

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This table compares Enduro Royalty Trust and SandRidge Mississippian Trust II’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enduro Royalty Trust 61.84% 45.42% 45.42%
SandRidge Mississippian Trust II 74.18% 17.64% 17.64%

Dividends

Enduro Royalty Trust pays an annual dividend of $0.45 per share and has a dividend yield of 13.0%. SandRidge Mississippian Trust II pays an annual dividend of $0.23 per share and has a dividend yield of 24.0%. Enduro Royalty Trust pays out 145.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Mississippian Trust II pays out 95.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Mississippian Trust II is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Enduro Royalty Trust and SandRidge Mississippian Trust II, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enduro Royalty Trust 0 1 0 0 2.00
SandRidge Mississippian Trust II 0 0 0 0 N/A

Enduro Royalty Trust currently has a consensus price target of $4.00, indicating a potential upside of 15.94%. Given Enduro Royalty Trust’s higher probable upside, analysts plainly believe Enduro Royalty Trust is more favorable than SandRidge Mississippian Trust II.

Valuation and Earnings

This table compares Enduro Royalty Trust and SandRidge Mississippian Trust II’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enduro Royalty Trust $45.59 million 2.50 $44.74 million $0.31 11.13
SandRidge Mississippian Trust II $20.41 million 2.34 $16.09 million $0.24 4.00

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

Insider and Institutional Ownership

56.8% of Enduro Royalty Trust shares are owned by institutional investors. Comparatively, 1.0% of SandRidge Mississippian Trust II shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Enduro Royalty Trust has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, SandRidge Mississippian Trust II has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Summary

Enduro Royalty Trust beats SandRidge Mississippian Trust II on 9 of the 13 factors compared between the two stocks.

Enduro Royalty Trust Company Profile

Enduro Royalty Trust (the Trust) is a statutory trust formed by Enduro Resource Partners LLC (Enduro), as trustor, The Bank of New York Mellon Trust Company, N.A. (the Trustee), as trustee, and Wilmington Trust Company (the Delaware Trustee), as Delaware Trustee. The Trust was created to acquire and hold for the benefit of the Trust unitholders a net profits interest representing the right to receive approximately 80% of the net profits from the sale of oil and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date of the conveyance of the net profits interest to the Trust (the Net Profits Interest). The properties in which the Trust holds the Net Profits Interest are referred to as the Underlying Properties. Enduro is engaged in the production and development of oil and natural gas. The Underlying Properties comprises producing and non-producing interests in oil and natural gas units, wells and lands.

SandRidge Mississippian Trust II Company Profile

SandRidge Mississippian Trust II is a statutory trust. The royalty interests conveyed by SandRidge Energy, Inc. (SandRidge) from its interests in certain properties in the Mississippian formation in northern Oklahoma and southern Kansas and held by the Trust are referred to as the Royalty Interests. The Trust holds Royalty Interests in specified oil and natural gas properties. The Royalty Interests entitle the Trust to receive approximately 80% of the proceeds from the sale of oil, natural gas and natural gas liquids (NGLs) production attributable to SandRidge’s net revenue interest in approximately 50 wells producing and over 10 additional wells awaiting (together, the Initial Wells), and over 70% of the proceeds from the sale of oil, natural gas and NGL production attributable to SandRidge’s net revenue interest in approximately 200 horizontal oil and natural gas development wells drilled (the Trust Development Wells) within an area of mutual interest (AMI).

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