Critical Analysis: Alvopetro Energy (OTCMKTS:ALVOF) & Kimbell Royalty Partners (NYSE:KRP)

Alvopetro Energy (OTCMKTS:ALVOF) and Kimbell Royalty Partners (NYSE:KRP) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Insider and Institutional Ownership

25.8% of Kimbell Royalty Partners shares are owned by institutional investors. 5.6% of Kimbell Royalty Partners shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Alvopetro Energy has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Kimbell Royalty Partners has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Dividends

Alvopetro Energy pays an annual dividend of $0.36 per share and has a dividend yield of 10.5%. Kimbell Royalty Partners pays an annual dividend of $1.72 per share and has a dividend yield of 11.0%. Alvopetro Energy pays out 47.4% of its earnings in the form of a dividend. Kimbell Royalty Partners pays out 187.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Alvopetro Energy and Kimbell Royalty Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alvopetro Energy	47.79%	42.00%	33.43%
Kimbell Royalty Partners	20.45%	8.98%	5.11%

Analyst Ratings

This is a summary of current ratings for Alvopetro Energy and Kimbell Royalty Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alvopetro Energy	0	0	0	0	N/A
Kimbell Royalty Partners	0	0	6	1	3.14

Kimbell Royalty Partners has a consensus price target of $21.00, suggesting a potential upside of 34.31%. Given Kimbell Royalty Partners’ higher possible upside, analysts clearly believe Kimbell Royalty Partners is more favorable than Alvopetro Energy.

Earnings and Valuation

This table compares Alvopetro Energy and Kimbell Royalty Partners’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alvopetro Energy	$59.69 million	2.10	$28.52 million	$0.76	4.49
Kimbell Royalty Partners	$294.07 million	5.03	$66.54 million	$0.92	16.99

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

Summary

Kimbell Royalty Partners beats Alvopetro Energy on 12 of the 16 factors compared between the two stocks.

About Alvopetro Energy

Alvopetro Energy Ltd. engages in the acquisition, exploration, development, and production of hydrocarbons. It holds interests in the Caburé and Murucututu natural gas assets, Block 182 and 183 exploration assets, and Bom Lugar and Mãe-da-lua oil fields, which covers an area of approximately 22,166 acres in the Recôncavo basin onshore Brazil. The company was incorporated in 2013 and is headquartered in Calgary, Canada.

About Kimbell Royalty Partners

Kimbell Royalty Partners, LP, together with its subsidiaries, engages in acquiring and owning mineral and royalty interests in oil and natural gas properties in the United States. It serves as the general partner of the company. The company was incorporated in 2015 and is based in Fort Worth, Texas.