Critical Review: Cross Timbers Royalty Trust (NYSE:CRT) & Velocity Energy (OTCMKTS:VCYE)

Cross Timbers Royalty Trust (NYSE:CRT) and Velocity Energy (OTCMKTS:VCYE) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Cross Timbers Royalty Trust and Velocity Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cross Timbers Royalty Trust	0	0	0	0	N/A
Velocity Energy	0	0	0	0	N/A

Institutional & Insider Ownership

9.7% of Cross Timbers Royalty Trust shares are held by institutional investors. 9.4% of Cross Timbers Royalty Trust shares are held by company insiders. Comparatively, 1.0% of Velocity Energy shares are held by company 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 Cross Timbers Royalty Trust and Velocity Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cross Timbers Royalty Trust	88.84%	291.46%	189.42%
Velocity Energy	N/A	N/A	N/A

Valuation & Earnings

This table compares Cross Timbers Royalty Trust and Velocity Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cross Timbers Royalty Trust	$12.36 million	4.82	$13.13 million	$1.28	7.76
Velocity Energy	N/A	N/A	N/A	($0.44)	N/A

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

Summary

Cross Timbers Royalty Trust beats Velocity Energy on 8 of the 8 factors compared between the two stocks.

About Cross Timbers Royalty Trust

Cross Timbers Royalty Trust operates as an express trust in the United States. It holds 90% net profits interests in certain producing and nonproducing royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico; and 75% net profits working interest in four properties in Texas and three properties in Oklahoma. The company was founded in 1991 and is based in Dallas, Texas.

About Velocity Energy

Velocity Energy Inc., an independent energy company, engages in the acquisition, exploration, development, and production of oil and natural gas. The company’s operations are located in Matagorda Bay, Calhoun County, Texas. It also focuses on the exploration of oil and natural gas in the Appalachian Basin. The company was formerly known as Sonterra Resources, Inc. and changed its name to Velocity Energy Inc. in March 2009. Velocity Energy Inc. was incorporated in 1999 and is based in Houston, Texas.