Contrasting Freehold Royalties (OTCMKTS:FRHLF) and SandRidge Energy (NYSE:SD)

SandRidge Energy (NYSE:SD) and Freehold Royalties (OTCMKTS:FRHLF) are both small-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Earnings & Valuation

This table compares SandRidge Energy and Freehold Royalties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SandRidge Energy	$156.36 million	3.27	$70.20 million	$2.24	6.15
Freehold Royalties	$224.34 million	8.57	$65.69 million	$0.61	19.21

SandRidge Energy has higher earnings, but lower revenue than Freehold Royalties. SandRidge Energy is trading at a lower price-to-earnings ratio than Freehold Royalties, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

61.8% of SandRidge Energy shares are held by institutional investors. 1.6% of SandRidge Energy shares are held by company 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 SandRidge Energy and Freehold Royalties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SandRidge Energy	46.06%	13.62%	10.93%
Freehold Royalties	43.59%	13.90%	10.09%

Dividends

SandRidge Energy pays an annual dividend of $0.52 per share and has a dividend yield of 3.8%. Freehold Royalties pays an annual dividend of $0.78 per share and has a dividend yield of 6.7%. SandRidge Energy pays out 23.2% of its earnings in the form of a dividend. Freehold Royalties pays out 127.9% 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 Energy has increased its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for SandRidge Energy and Freehold Royalties, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SandRidge Energy	0	2	0	0	2.00
Freehold Royalties	0	5	0	0	2.00

Summary

SandRidge Energy beats Freehold Royalties on 8 of the 13 factors compared between the two stocks.

About SandRidge Energy

SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.

About Freehold Royalties

Freehold Royalties Ltd. engages in the acquiring and managing royalty interests in the crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. Freehold Royalties Ltd. was founded in 1996 and is headquartered in Calgary, Canada.