Financial Analysis: ECA Marcellus Trust I (OTCMKTS:ECT) vs. SM Energy (NYSE:SM)

SM Energy (NYSE:SM) and ECA Marcellus Trust I (OTCMKTS:ECT) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Valuation & Earnings

This table compares SM Energy and ECA Marcellus Trust I”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SM Energy	$2.37 billion	1.83	$817.88 million	$7.16	5.30
ECA Marcellus Trust I	$4.15 million	1.70	$2.90 million	N/A	N/A

SM Energy has higher revenue and earnings than ECA Marcellus Trust I.

Institutional and Insider Ownership

94.6% of SM Energy shares are held by institutional investors. Comparatively, 2.0% of ECA Marcellus Trust I shares are held by institutional investors. 1.5% of SM Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

SM Energy has a beta of 4.14, indicating that its share price is 314% more volatile than the S&P 500. Comparatively, ECA Marcellus Trust I has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500.

Profitability

This table compares SM Energy and ECA Marcellus Trust I’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SM Energy	33.89%	19.62%	10.87%
ECA Marcellus Trust I	46.53%	4.37%	4.32%

Analyst Ratings

This is a summary of recent ratings and target prices for SM Energy and ECA Marcellus Trust I, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SM Energy	0	6	5	1	2.58
ECA Marcellus Trust I	0	0	0	0	0.00

SM Energy currently has a consensus price target of $51.90, indicating a potential upside of 36.77%. Given SM Energy’s stronger consensus rating and higher possible upside, analysts clearly believe SM Energy is more favorable than ECA Marcellus Trust I.

Summary

SM Energy beats ECA Marcellus Trust I on 13 of the 14 factors compared between the two stocks.

About SM Energy

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas. It has working interests in oil and gas producing wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.

About ECA Marcellus Trust I

ECA Marcellus Trust I is a statutory trust. It owns royalty interest in producing wells and development wells. It also acquires horizontal natural gas development wells to be drilled to the Marcellus Shale formation. The company was founded in March 2010 and is headquartered in Houston, TX.