Analyzing LandBridge (NYSE:LB) and Mesa Royalty Trust (NYSE:MTR)

LandBridge (NYSE:LB) and Mesa Royalty Trust (NYSE:MTR) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

LandBridge pays an annual dividend of $0.60 per share and has a dividend yield of 1.1%. Mesa Royalty Trust pays an annual dividend of $0.06 per share and has a dividend yield of 1.0%. LandBridge pays out 16.9% of its earnings in the form of a dividend. Mesa Royalty Trust pays out 5.0% 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.

Valuation and Earnings

This table compares LandBridge and Mesa Royalty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LandBridge	$100.26 million	41.03	$260.42 million	$3.56	15.80
Mesa Royalty Trust	$1.14 million	9.97	$2.86 million	$1.21	5.07

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

Institutional & Insider Ownership

12.7% of Mesa Royalty Trust shares are held by institutional investors. 17.8% of LandBridge shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares LandBridge and Mesa Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LandBridge	N/A	N/A	N/A
Mesa Royalty Trust	76.94%	28.92%	26.82%

Analyst Recommendations

This is a breakdown of current ratings for LandBridge and Mesa Royalty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LandBridge	0	2	6	0	2.75
Mesa Royalty Trust	0	0	0	0	N/A

LandBridge currently has a consensus target price of $36.57, indicating a potential downside of 34.97%. Given LandBridge’s higher probable upside, equities research analysts clearly believe LandBridge is more favorable than Mesa Royalty Trust.

Summary

LandBridge beats Mesa Royalty Trust on 9 of the 14 factors compared between the two stocks.

About LandBridge

LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States. It owns surface acres in and around the Delaware Basin in Texas and New Mexico. The company holds a portfolio of oil and gas royalties. It also sells brackish water and other surface composite materials. The company was founded in 2021 and is based in Houston, Texas. LandBridge Company LLC operates as a subsidiary of LandBridge Holdings LLC.

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.