Analyzing Western Midstream Partners (NYSE:WES) & Mesa Royalty Trust (NYSE:MTR)

Mesa Royalty Trust (NYSE:MTR) and Western Midstream Partners (NYSE:WES) are both energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Valuation and Earnings

This table compares Mesa Royalty Trust and Western Midstream Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesa Royalty Trust	$476,742.00	9.42	$510,000.00	$0.16	15.06
Western Midstream Partners	$4.33 billion	4.33	$1.18 billion	$3.18	14.29

Western Midstream Partners has higher revenue and earnings than Mesa Royalty Trust. Western Midstream Partners 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.

Institutional & Insider Ownership

12.7% of Mesa Royalty Trust shares are owned by institutional investors. Comparatively, 84.8% of Western Midstream Partners shares are owned by institutional investors. 0.0% of Western Midstream Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Mesa Royalty Trust and Western Midstream Partners, 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
Western Midstream Partners	0	6	3	2	2.64

Western Midstream Partners has a consensus price target of $49.89, suggesting a potential upside of 9.76%. Given Western Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Western Midstream Partners is more favorable than Mesa Royalty Trust.

Dividends

Mesa Royalty Trust pays an annual dividend of $0.29 per share and has a dividend yield of 12.0%. Western Midstream Partners pays an annual dividend of $3.72 per share and has a dividend yield of 8.2%. Mesa Royalty Trust pays out 181.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Midstream Partners pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mesa Royalty Trust has increased its dividend for 1 consecutive years and Western Midstream Partners has increased its dividend for 5 consecutive years.

Risk and Volatility

Mesa Royalty Trust has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Western Midstream Partners has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Mesa Royalty Trust and Western Midstream Partners’ 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%
Western Midstream Partners	29.44%	33.13%	8.74%

Summary

Western Midstream Partners beats Mesa Royalty Trust on 13 of the 18 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 Western Midstream Partners

Western Midstream Partners, LP, together with its subsidiaries, operates as a midstream energy company primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. The company also buys and sells natural gas, NGLs, and condensate. It operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.