Dorchester Minerals (NASDAQ:DMLP) versus Riley Exploration Permian (NYSE:REPX) Critical Contrast

Riley Exploration Permian (NYSE:REPX) and Dorchester Minerals (NASDAQ:DMLP) are both small-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Riley Exploration Permian and Dorchester Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Riley Exploration Permian	28.48%	23.82%	11.31%
Dorchester Minerals	56.77%	36.86%	36.00%

Institutional and Insider Ownership

58.9% of Riley Exploration Permian shares are owned by institutional investors. Comparatively, 19.2% of Dorchester Minerals shares are owned by institutional investors. 4.7% of Riley Exploration Permian shares are owned by insiders. Comparatively, 5.9% of Dorchester Minerals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Riley Exploration Permian pays an annual dividend of $1.52 per share and has a dividend yield of 5.6%. Dorchester Minerals pays an annual dividend of $2.90 per share and has a dividend yield of 10.3%. Riley Exploration Permian pays out 32.5% of its earnings in the form of a dividend. Dorchester Minerals pays out 142.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Riley Exploration Permian has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Riley Exploration Permian and Dorchester Minerals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Riley Exploration Permian	$412.89 million	1.44	$111.59 million	$4.68	5.77
Dorchester Minerals	$173.71 million	7.69	$110.39 million	$2.04	13.84

Riley Exploration Permian has higher revenue and earnings than Dorchester Minerals. Riley Exploration Permian is trading at a lower price-to-earnings ratio than Dorchester Minerals, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Riley Exploration Permian has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Dorchester Minerals has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Riley Exploration Permian and Dorchester Minerals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Riley Exploration Permian	0	0	1	0	3.00
Dorchester Minerals	0	0	0	0	0.00

Riley Exploration Permian currently has a consensus price target of $47.00, suggesting a potential upside of 73.95%. Given Riley Exploration Permian’s stronger consensus rating and higher possible upside, equities analysts plainly believe Riley Exploration Permian is more favorable than Dorchester Minerals.

Summary

Riley Exploration Permian beats Dorchester Minerals on 10 of the 17 factors compared between the two stocks.

About Riley Exploration Permian

Riley Exploration Permian, Inc., an independent oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in Texas and New Mexico. The company's activities are primarily focused on the Northwest Shelf and Yeso trend of the Permian Basin. Its acreage is primarily located on contiguous blocks in Yoakum County, Texas; and Eddy County, New Mexico. Riley Exploration Permian, Inc. is headquartered in Oklahoma City, Oklahoma.

About Dorchester Minerals

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of royalty properties in the United States. Its royalty properties include producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests in 593 counties and parishes in 28 states; and net profits interests represent net profits overriding royalty interests in various properties owned by the operating partnership. Dorchester Minerals Management LP serves as the general partner of Dorchester Minerals, L.P. The company was founded in 1982 and is based in Dallas, Texas.