Critical Survey: Permian Resources (NYSE:PR) versus Kimbell Royalty Partners (NYSE:KRP)

Kimbell Royalty Partners (NYSE:KRP) and Permian Resources (NYSE:PR) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Insider & Institutional Ownership

25.8% of Kimbell Royalty Partners shares are owned by institutional investors. Comparatively, 91.8% of Permian Resources shares are owned by institutional investors. 5.6% of Kimbell Royalty Partners shares are owned by company insiders. Comparatively, 12.8% of Permian Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kimbell Royalty Partners and Permian Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kimbell Royalty Partners	1	0	4	1	2.83
Permian Resources	0	2	13	1	2.94

Kimbell Royalty Partners presently has a consensus target price of $20.50, suggesting a potential upside of 26.54%. Permian Resources has a consensus target price of $18.73, suggesting a potential upside of 31.83%. Given Permian Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Permian Resources is more favorable than Kimbell Royalty Partners.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kimbell Royalty Partners	10.74%	5.03%	2.66%
Permian Resources	15.62%	11.91%	7.45%

Risk & Volatility

Kimbell Royalty Partners has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Permian Resources has a beta of 4.32, meaning that its stock price is 332% more volatile than the S&P 500.

Earnings and Valuation

This table compares Kimbell Royalty Partners and Permian Resources”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kimbell Royalty Partners	$321.86 million	4.80	$66.54 million	$0.60	26.99
Permian Resources	$3.12 billion	3.65	$476.31 million	$1.25	11.37

Permian Resources has higher revenue and earnings than Kimbell Royalty Partners. Permian Resources 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.

Dividends

Kimbell Royalty Partners pays an annual dividend of $1.68 per share and has a dividend yield of 10.4%. Permian Resources pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Kimbell Royalty Partners pays out 280.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Permian Resources pays out 19.2% of its earnings in the form of a dividend.

Summary

Permian Resources beats Kimbell Royalty Partners on 13 of the 16 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 Permian Resources

Permian Resources Corporation, an independent oil and natural gas company, focuses on the development of crude oil and related liquids-rich natural gas reserves in the United States. The company’s assets primarily focus on the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of acreage blocks in West Texas, Eddy County, Lea County, and New Mexico. The company was formerly known as Centennial Resource Development, Inc. and changed its name to Permian Resources Corporation in September 2022. Permian Resources Corporation was incorporated in 2015 and is headquartered in Midland, Texas.