Mesa Royalty Trust (NYSE:MTR) & Plains GP (NYSE:PAGP) Critical Comparison

Mesa Royalty Trust (NYSE:MTR) and Plains GP (NYSE:PAGP) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Institutional & Insider Ownership

12.7% of Mesa Royalty Trust shares are owned by institutional investors. Comparatively, 88.3% of Plains GP shares are owned by institutional investors. 6.9% of Plains GP shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Mesa Royalty Trust and Plains GP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mesa Royalty Trust	60.59%	9.17%	8.82%
Plains GP	0.21%	0.70%	0.36%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Mesa Royalty Trust and Plains GP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesa Royalty Trust	1	0	0	0	1.00
Plains GP	2	6	5	1	2.36

Plains GP has a consensus price target of $26.00, suggesting a potential upside of 0.85%. Given Plains GP’s stronger consensus rating and higher possible upside, analysts plainly believe Plains GP is more favorable than Mesa Royalty Trust.

Risk and Volatility

Mesa Royalty Trust has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, Plains GP has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Earnings and Valuation

This table compares Mesa Royalty Trust and Plains GP”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesa Royalty Trust	$600,000.00	5.97	$510,000.00	$0.16	12.03
Plains GP	$52.30 billion	0.10	$103.00 million	$2.79	9.24

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

Summary

Plains GP beats Mesa Royalty Trust on 11 of the 15 factors compared between the two stocks.

About Mesa Royalty Trust

Mesa Royalty Trust owns overriding royalty interests in various oil and gas producing properties in the United States. It holds interests in properties located in the Hugoton field of Kansas; and the San Juan Basin field of Northwestern New Mexico and Southwestern Colorado. The company was founded in 1979 and is based in Houston, Texas.

About Plains GP

Plains GP Holdings, L.P., through its subsidiary, Plains All American Pipeline, L.P., owns and operates midstream infrastructure systems in the United States and Canada. It operates in two segments, Crude Oil and Natural Gas Liquids (NGLs). The company engages in the gathering and transporting crude oil and NGLs using pipelines, gathering systems, and trucks. It engages in the loading and unloading services at terminals; NGL fractionation and isomerization services; and natural gas and condensate processing services. The company offers logistics services to producers, refiners, and other customers. PAA GP Holdings LLC operates as a general partner of the company. Plains GP Holdings, L.P. was incorporated in 2013 and is headquartered in Houston, Texas.