Analyzing Kimbell Royalty Partners (NYSE:KRP) & Viper Energy (NASDAQ:VNOM)

Kimbell Royalty Partners (NYSE:KRP) and Viper Energy (NASDAQ:VNOM) 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, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Risk and Volatility

Kimbell Royalty Partners has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Viper Energy has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500.

Insider & Institutional Ownership

25.8% of Kimbell Royalty Partners shares are owned by institutional investors. Comparatively, 87.7% of Viper Energy shares are owned by institutional investors. 5.6% of Kimbell Royalty Partners shares are owned by company insiders. Comparatively, 0.3% of Viper Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Kimbell Royalty Partners pays an annual dividend of $1.64 per share and has a dividend yield of 10.6%. Viper Energy pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Kimbell Royalty Partners pays out 321.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Viper Energy pays out 51.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Kimbell Royalty Partners and Viper Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kimbell Royalty Partners	$294.07 million	5.03	$66.54 million	$0.51	30.34
Viper Energy	$827.70 million	12.87	$200.09 million	$2.33	21.46

Viper Energy has higher revenue and earnings than Kimbell Royalty Partners. Viper 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Kimbell Royalty Partners and Viper Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kimbell Royalty Partners	1	0	3	1	2.80
Viper Energy	0	0	11	0	3.00

Kimbell Royalty Partners presently has a consensus target price of $21.20, indicating a potential upside of 37.00%. Viper Energy has a consensus target price of $59.55, indicating a potential upside of 19.09%. Given Kimbell Royalty Partners’ higher possible upside, research analysts plainly believe Kimbell Royalty Partners is more favorable than Viper Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kimbell Royalty Partners	11.33%	5.82%	3.05%
Viper Energy	24.65%	6.72%	4.98%

Summary

Viper Energy beats Kimbell Royalty Partners on 12 of the 17 factors compared between the two stocks.

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.

About Viper Energy

Viper Energy, Inc. engages in the acquisition of oil and natural gas properties. It owns, acquires, and exploits oil and natural gas properties in North America. The company was founded on February 27, 2014 and is headquartered in Midland, TX.