Peabody Energy (NYSE:BTU – 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 institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.
Earnings and Valuation
This table compares Peabody Energy and Texas Pacific Land”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Peabody Energy | $4.01 billion | 0.76 | -$52.90 million | ($1.50) | -16.71 |
| Texas Pacific Land | $798.19 million | 30.96 | $481.38 million | $7.85 | 45.64 |
Insider and Institutional Ownership
87.4% of Peabody Energy shares are held by institutional investors. Comparatively, 59.9% of Texas Pacific Land shares are held by institutional investors. 0.5% of Peabody Energy shares are held by insiders. Comparatively, 0.3% of Texas Pacific Land shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Dividends
Peabody Energy pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Texas Pacific Land pays an annual dividend of $2.40 per share and has a dividend yield of 0.7%. Peabody Energy pays out -20.0% of its earnings in the form of a dividend. Texas Pacific Land pays out 30.6% 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. Peabody Energy has increased its dividend for 1 consecutive years and Texas Pacific Land has increased its dividend for 3 consecutive years. Peabody Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of current ratings for Peabody Energy and Texas Pacific Land, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Peabody Energy | 1 | 3 | 2 | 0 | 2.17 |
| Texas Pacific Land | 1 | 2 | 1 | 0 | 2.00 |
Peabody Energy currently has a consensus target price of $33.88, suggesting a potential upside of 35.13%. Texas Pacific Land has a consensus target price of $639.00, suggesting a potential upside of 78.34%. Given Texas Pacific Land’s higher possible upside, analysts plainly believe Texas Pacific Land is more favorable than Peabody Energy.
Profitability
This table compares Peabody Energy and Texas Pacific Land’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Peabody Energy | -4.56% | -5.22% | -3.22% |
| Texas Pacific Land | 60.32% | 35.76% | 32.04% |
Risk and Volatility
Peabody Energy has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, Texas Pacific Land has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.
Summary
Texas Pacific Land beats Peabody Energy on 10 of the 17 factors compared between the two stocks.
About Peabody Energy
Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.
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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