Viper Energy Partners (NASDAQ: VNOM) and MV Oil Trust (NYSE:MVO) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.
Insider & Institutional Ownership
26.9% of Viper Energy Partners shares are owned by institutional investors. Comparatively, 12.1% of MV Oil Trust shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings for Viper Energy Partners and MV Oil Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||0||11||0||3.00|
|MV Oil Trust||0||0||0||0||N/A|
Viper Energy Partners presently has a consensus price target of $27.00, indicating a potential upside of 20.27%. Given Viper Energy Partners’ higher possible upside, equities research analysts clearly believe Viper Energy Partners is more favorable than MV Oil Trust.
Valuation and Earnings
This table compares Viper Energy Partners and MV Oil Trust’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Viper Energy Partners||$172.03 million||14.86||$111.47 million||$1.06||21.18|
|MV Oil Trust||$9.11 million||9.66||$8.28 million||$0.76||10.07|
Viper Energy Partners has higher revenue and earnings than MV Oil Trust. MV Oil Trust is trading at a lower price-to-earnings ratio than Viper Energy Partners, indicating that it is currently the more affordable of the two stocks.
Viper Energy Partners pays an annual dividend of $1.84 per share and has a dividend yield of 8.2%. MV Oil Trust pays an annual dividend of $0.88 per share and has a dividend yield of 11.5%. Viper Energy Partners pays out 173.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MV Oil Trust pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MV Oil Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Viper Energy Partners has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, MV Oil Trust has a beta of 0.1, indicating that its stock price is 90% less volatile than the S&P 500.
This table compares Viper Energy Partners and MV Oil Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Viper Energy Partners||64.80%||13.92%||13.02%|
|MV Oil Trust||90.79%||N/A||46.18%|
Viper Energy Partners beats MV Oil Trust on 10 of the 14 factors compared between the two stocks.
Viper Energy Partners Company Profile
Viper Energy Partners LP is engaged in owning, acquiring and exploiting oil and natural gas properties in North America. The Company’s assets are located in the Permian Basin of West Texas. As of December 31, 2016, the Permian Basin consisted of approximately 85,000 square miles. As of December 31, 2016, its assets consisted of mineral interests underlying 107,568 gross acres in the Permian Basin. As of December 31, 2016, there were 545 vertical wells and 190 horizontal wells producing on this acreage. As of December 31, 2016, its estimated proved oil and natural gas reserves of its assets was 31,435 thousand barrels of crude oil equivalent (MBOE). As of December 31, 2016, the Company’s proved reserves were approximately 68% oil, 18% natural gas liquids and 14% natural gas. In addition to its mineral interests, the Company owns a minor equity interest in an entity that owns mineral, overriding royalty, net profits, leasehold and other similar interests.
MV Oil Trust Company Profile
MV Oil Trust (the Trust) is a statutory trust. The Trust acquires and holds a term net profits interest for the benefit of the Trust unitholders. Its underlying properties consist of MV Partners, LLC’s (MV Partners) net interests in all of its oil and natural gas properties, which are located in the Mid-Continent region in the States of Kansas and Colorado. These oil and gas properties include approximately 1,000 producing oil and gas wells. The underlying properties located in the El Dorado Area are operated on behalf of MV Partners by Vess Oil Corporation (Vess Oil) and are located in the El Dorado, Augusta and Valley Center Fields. Each of Vess Oil and Murfin Drilling Company, Inc. (Murfin Drilling) operate leases on behalf of MV Partners included in the underlying properties that are located in the Northwest Kansas Area. The primary fields in this area are the Bemis-Shutts, Trapp, Ray and Hansen Fields.
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