Comparing Equinor ASA (NYSE:EQNR) and Mesa Royalty Trust (NYSE:MTR)

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

Profitability

This table compares Mesa Royalty Trust and Equinor ASA’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%
Equinor ASA	7.92%	23.60%	7.21%

Valuation and Earnings

This table compares Mesa Royalty Trust and Equinor ASA”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	7.74	$510,000.00	$0.16	12.38
Equinor ASA	$113.65 billion	0.99	$5.04 billion	$3.67	12.79

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Mesa Royalty Trust and Equinor ASA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesa Royalty Trust	1	0	0	0	1.00
Equinor ASA	3	11	3	2	2.21

Equinor ASA has a consensus price target of $43.47, indicating a potential downside of 7.43%. Given Equinor ASA’s stronger consensus rating and higher possible upside, analysts clearly believe Equinor ASA is more favorable than Mesa Royalty Trust.

Volatility and Risk

Mesa Royalty Trust has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Equinor ASA has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Dividends

Mesa Royalty Trust pays an annual dividend of $0.29 per share and has a dividend yield of 14.6%. Equinor ASA pays an annual dividend of $1.28 per share and has a dividend yield of 2.7%. 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. Equinor ASA pays out 34.9% of its earnings in the form of a dividend. Mesa Royalty Trust has raised its dividend for 1 consecutive years. Mesa Royalty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

12.7% of Mesa Royalty Trust shares are held by institutional investors. Comparatively, 5.5% of Equinor ASA shares are held by institutional investors. 0.0% of Equinor ASA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Equinor ASA beats Mesa Royalty Trust on 11 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 Equinor ASA

Equinor ASA, an energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and other forms of energy in Norway and internationally. It operates through Exploration & Production Norway; Exploration & Production International; Exploration & Production USA; Marketing, Midstream & Processing; Renewables; and Other segments. The company also transports, processes, manufactures, markets, and trades in oil and gas commodities, such as crude and condensate products, gas liquids, natural gas, and liquefied natural gas; trades in power and emissions; operates refineries, terminals and processing, and power plants; and develops low carbon solutions for oil and gas. In addition, it develops carbon capture and storage projects; provides transportation solutions, including pipelines, shipping, trucking, and rail; and develops and explores for renewable energy, such as offshore wind, green hydrogen, and solar power. The company was formerly known as Statoil ASA and changed its name to Equinor ASA in May 2018. Equinor ASA was incorporated in 1972 and is headquartered in Stavanger, Norway.