Head-To-Head Comparison: TXO Partners (NYSE:TXO) and Epsilon Energy (NASDAQ:EPSN)

TXO Partners (NYSE:TXO) and Epsilon Energy (NASDAQ:EPSN) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for TXO Partners and Epsilon Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXO Partners	0	0	0	0	0.00
Epsilon Energy	0	0	1	1	3.50

Epsilon Energy has a consensus target price of $7.00, suggesting a potential downside of 3.45%. Given Epsilon Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Epsilon Energy is more favorable than TXO Partners.

Insider & Institutional Ownership

27.4% of TXO Partners shares are owned by institutional investors. Comparatively, 60.3% of Epsilon Energy shares are owned by institutional investors. 5.5% of Epsilon Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares TXO Partners and Epsilon Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXO Partners	-63.22%	8.05%	5.41%
Epsilon Energy	16.97%	5.31%	4.30%

Volatility & Risk

TXO Partners has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Epsilon Energy has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Earnings and Valuation

This table compares TXO Partners and Epsilon Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXO Partners	$282.81 million	2.88	-$103.99 million	$0.69	28.71
Epsilon Energy	$31.15 million	5.09	$6.95 million	$0.25	29.00

Epsilon Energy has lower revenue, but higher earnings than TXO Partners. TXO Partners is trading at a lower price-to-earnings ratio than Epsilon Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

TXO Partners pays an annual dividend of $2.44 per share and has a dividend yield of 12.3%. Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 3.4%. TXO Partners pays out 353.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Epsilon Energy pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Epsilon Energy beats TXO Partners on 12 of the 17 factors compared between the two stocks.

About TXO Partners

TXO Partners, L.P., an oil and natural gas company, focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The company was formerly known as TXO Energy Partners, L.P. and changed its name to TXO Partners, L.P. in May 2023. TXO Partners, L.P. was incorporated in 2012 and is based in Fort Worth, Texas.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.