Critical Comparison: Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) versus Permianville Royalty Trust (NYSE:PVL)

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) and Permianville Royalty Trust (NYSE:PVL) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Risk & Volatility

Petróleo Brasileiro S.A. – Petrobras has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Permianville Royalty Trust has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Institutional and Insider Ownership

6.8% of Permianville Royalty Trust shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Petróleo Brasileiro S.A. – Petrobras and Permianville Royalty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petróleo Brasileiro S.A. – Petrobras	$102.41 billion	N/A	$24.88 billion	$2.56	5.53
Permianville Royalty Trust	$45.21 million	1.12	$10.60 million	$0.24	6.42

Petróleo Brasileiro S.A. – Petrobras has higher revenue and earnings than Permianville Royalty Trust. Petróleo Brasileiro S.A. – Petrobras is trading at a lower price-to-earnings ratio than Permianville Royalty Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Petróleo Brasileiro S.A. – Petrobras and Permianville Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petróleo Brasileiro S.A. – Petrobras	16.96%	29.35%	10.79%
Permianville Royalty Trust	22.94%	24.99%	24.88%

Dividends

Petróleo Brasileiro S.A. – Petrobras pays an annual dividend of $0.86 per share and has a dividend yield of 6.1%. Permianville Royalty Trust pays an annual dividend of $0.18 per share and has a dividend yield of 11.7%. Petróleo Brasileiro S.A. – Petrobras pays out 33.6% of its earnings in the form of a dividend. Permianville Royalty Trust pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Petróleo Brasileiro S.A. – Petrobras and Permianville Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petróleo Brasileiro S.A. – Petrobras	0	3	5	0	2.63
Permianville Royalty Trust	0	0	0	0	0.00

Petróleo Brasileiro S.A. – Petrobras currently has a consensus target price of $18.24, suggesting a potential upside of 28.79%. Given Petróleo Brasileiro S.A. – Petrobras’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Petróleo Brasileiro S.A. – Petrobras is more favorable than Permianville Royalty Trust.

Summary

Petróleo Brasileiro S.A. – Petrobras beats Permianville Royalty Trust on 9 of the 14 factors compared between the two stocks.

About Petróleo Brasileiro S.A. – Petrobras

Petróleo Brasileiro S.A. – Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through three segments: Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries. The Refining, Transportation and Marketing segment engages in the refining, logistics, transport, acquisition, and exports of crude oil; and production of fertilizers, as well as holding interests in petrochemical companies. The Gas and Power segment is involved in the logistic and trading of natural gas and electricity; transportation and trading of LNG; generation of electricity through thermoelectric power plants; renewable energy businesses; low carbon services; and natural gas processing business, as well as production of biodiesel and its co-products. The company also engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields, and shale or other rocks, as well as oil products, natural gas, and other liquid hydrocarbons. In addition, it engages in research, development, production, transport, distribution, and trading of energy. Petróleo Brasileiro S.A. – Petrobras was incorporated in 1953 and is headquartered in Rio de Janeiro, Brazil.

About Permianville Royalty Trust

Permianville Royalty Trust operates as a statutory trust. It is involved in the acquisition and holding of net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in the states of Texas, Louisiana, and New Mexico. The company was formerly known as Enduro Royalty Trust and changed its name to Permianville Royalty Trust in September 2018. Permianville Royalty Trust was incorporated in 2011 and is based in Houston, Texas.