Q: What are your thoughts on the following 2 Companies?
5i Research Answer:
PHX is a much larger company than SRR, at a market cap of $224.8M vs. $27.3M, respectively. Both names pay a strong yield (PHX at 10.4% and SRR at 8.3%), but PHX is much cheaper at 4.5X forward earnings vs. SRR at 17.7X. PHX has a longer history of being a public company than SRR, which recently went public in early 2022. Due to its larger size, cheaper valuation, and longer history, we would prefer PHX here today. We feel that if an investor has a positive outlook on the energy sector, PHX can perform well due to its strong sales growth rates, good yield, low debt levels, and strong margins.