Meren Energy (OTCMKTS:AOIFF – Get Free Report) and Texas Pacific Land (NYSE:TPL – Get Free Report) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.
Valuation and Earnings
This table compares Meren Energy and Texas Pacific Land”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Meren Energy | N/A | N/A | -$279.10 million | ($0.52) | -2.50 |
| Texas Pacific Land | $798.19 million | 35.19 | $481.38 million | $7.30 | 55.78 |
Risk and Volatility
Meren Energy has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Texas Pacific Land has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Dividends
Meren Energy pays an annual dividend of $0.14 per share and has a dividend yield of 10.8%. Texas Pacific Land pays an annual dividend of $2.40 per share and has a dividend yield of 0.6%. Meren Energy pays out -26.9% of its earnings in the form of a dividend. Texas Pacific Land pays out 32.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Texas Pacific Land has increased its dividend for 3 consecutive years. Meren Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Meren Energy and Texas Pacific Land, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Meren Energy | 0 | 0 | 0 | 0 | 0.00 |
| Texas Pacific Land | 1 | 2 | 1 | 0 | 2.00 |
Texas Pacific Land has a consensus price target of $639.00, suggesting a potential upside of 56.92%. Given Texas Pacific Land’s stronger consensus rating and higher probable upside, analysts clearly believe Texas Pacific Land is more favorable than Meren Energy.
Profitability
This table compares Meren Energy and Texas Pacific Land’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Meren Energy | N/A | 3.52% | 1.68% |
| Texas Pacific Land | 60.03% | 35.52% | 31.95% |
Institutional & Insider Ownership
59.9% of Texas Pacific Land shares are held by institutional investors. 1.0% of Meren Energy shares are held by insiders. Comparatively, 6.9% of Texas Pacific Land shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Texas Pacific Land beats Meren Energy on 14 of the 16 factors compared between the two stocks.
About Meren Energy
Africa Oil Corp., together with its subsidiaries, operates as an oil and gas exploration and production company in Kenya, Nigeria, and South Africa. The company holds interests in producing and development assets in deep-water Nigeria, and development assets in Kenya. It also has a portfolio of exploration and appraisal assets in Namibia, Nigeria, South Africa, and Kenya, as well as Guyana and Senegal Guinea Bissau Joint Development Zone. The company was formerly known as Canmex Minerals Corporation and changed its name to Africa Oil Corp. in August 2007. Africa Oil Corp. was incorporated in 1983 and is headquartered in Vancouver, Canada.
About Texas Pacific Land
Texas Pacific Land Corporation engages in the land and resource management, and water services and operations businesses. The company owns a 1/128th nonparticipating perpetual oil and gas royalty interest (NPRI) under approximately 85,000 acres of land; a 1/16th NPRI under approximately 371,000 acres of land; and approximately 4,000 additional net royalty acres, total of approximately 195,000 NRA located in the western part of Texas. The Land and Resource Management segment manages surface acres of land, and oil and gas royalty interest in West Texas. This segment also engages in easements, such as transporting oil, gas and related hydrocarbons, power line and utility, and subsurface wellbore easements. In addition, this segment leases its land for processing, storage, and compression facilities and roads; and is involved in sale of materials, such as caliche, sand, and other material, as well as sells land. The Water Services and Operations segment provides full-service water offerings, including water sourcing, produced-water treatment, infrastructure development, and disposal solutions to operators in the Permian Basin. This segment also holds produced water royalties. Texas Pacific Land Corporation was founded in 1888 and is headquartered in Dallas, Texas.
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