Critical Comparison: Kimbell Royalty Partners (NYSE:KRP) vs. Viper Energy (NASDAQ:VNOM)

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

Analyst Ratings

This is a summary of current recommendations for Viper Energy and Kimbell Royalty Partners, as reported by MarketBeat.com.

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

Viper Energy currently has a consensus target price of $59.55, suggesting a potential upside of 20.59%. Kimbell Royalty Partners has a consensus target price of $21.20, suggesting a potential upside of 37.57%. Given Kimbell Royalty Partners’ higher possible upside, analysts clearly believe Kimbell Royalty Partners is more favorable than Viper Energy.

Earnings and Valuation

This table compares Viper Energy and Kimbell Royalty Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Viper Energy	$827.70 million	11.24	$200.09 million	$2.33	21.19
Kimbell Royalty Partners	$294.07 million	5.00	$66.54 million	$0.51	30.22

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.

Profitability

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

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

Volatility & Risk

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

Dividends

Viper Energy pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Kimbell Royalty Partners pays an annual dividend of $1.64 per share and has a dividend yield of 10.6%. Viper Energy pays out 51.5% of its earnings in the form of a dividend. 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.

Institutional and Insider Ownership

87.7% of Viper Energy shares are held by institutional investors. Comparatively, 25.8% of Kimbell Royalty Partners shares are held by institutional investors. 0.3% of Viper Energy shares are held by insiders. Comparatively, 5.6% of Kimbell Royalty Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

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

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.

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.