Head-To-Head Contrast: Kimbell Royalty (NYSE:KRP) versus Permian Basin Royalty Trust (NYSE:PBT)

Permian Basin Royalty Trust (NYSE:PBT) and Kimbell Royalty (NYSE:KRP) are both small-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Profitability

This table compares Permian Basin Royalty Trust and Kimbell Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Permian Basin Royalty Trust	93.60%	12,661.40%	593.31%
Kimbell Royalty	5.25%	9.69%	4.95%

Analyst Recommendations

This is a breakdown of current ratings for Permian Basin Royalty Trust and Kimbell Royalty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Permian Basin Royalty Trust	0	0	0	0	0.00
Kimbell Royalty	1	3	1	0	2.00

Kimbell Royalty has a consensus target price of $17.40, indicating a potential upside of 21.09%. Given Kimbell Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Kimbell Royalty is more favorable than Permian Basin Royalty Trust.

Dividends

Permian Basin Royalty Trust pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Kimbell Royalty pays an annual dividend of $1.88 per share and has a dividend yield of 13.1%. Permian Basin Royalty Trust pays out 32.7% of its earnings in the form of a dividend. Kimbell Royalty pays out 3,760.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Permian Basin Royalty Trust	$26.96 million	21.94	$25.42 million	$0.49	25.90
Kimbell Royalty	$309.31 million	4.97	$12.32 million	$0.05	287.40

Permian Basin Royalty Trust has higher earnings, but lower revenue than Kimbell Royalty. Permian Basin Royalty Trust is trading at a lower price-to-earnings ratio than Kimbell Royalty, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

28.9% of Permian Basin Royalty Trust shares are owned by institutional investors. Comparatively, 25.8% of Kimbell Royalty shares are owned by institutional investors. 5.6% of Kimbell Royalty shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Permian Basin Royalty Trust has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Kimbell Royalty has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Summary

Permian Basin Royalty Trust beats Kimbell Royalty on 9 of the 16 factors compared between the two stocks.

About Permian Basin Royalty Trust

Permian Basin Royalty Trust, an express trust, holds royalty interests in various oil and gas properties in the United States. The company holds a 75% net overriding royalty interest in the Waddell Ranch properties, including Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell fields in Crane County, Texas. It also holds a 95% net overriding royalty in the Texas Royalty properties, which consist of various producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole, and others located in Texas. Its Texas Royalty properties comprise approximately 125 separate royalty interests containing approximately 51,000 net producing acres. The company was founded in 1980 and is based in Dallas, Texas.

About Kimbell Royalty

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.