Financial Analysis: Viper Energy (NASDAQ:VNOM) and Granite Ridge Resources (NYSE:GRNT)

Viper Energy (NASDAQ:VNOM) and Granite Ridge Resources (NYSE:GRNT) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Institutional and Insider Ownership

87.7% of Viper Energy shares are held by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are held by institutional investors. 0.2% of Viper Energy shares are held by company insiders. Comparatively, 8.5% of Granite Ridge Resources shares are held 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.

Valuation & Earnings

This table compares Viper Energy and Granite Ridge Resources”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Viper Energy	$860.39 million	12.59	$359.24 million	$2.42	15.52
Granite Ridge Resources	$380.03 million	1.78	$18.76 million	$0.24	21.44

Viper Energy has higher revenue and earnings than Granite Ridge Resources. Viper Energy is trading at a lower price-to-earnings ratio than Granite Ridge Resources, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Viper Energy has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Granite Ridge Resources has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Dividends

Viper Energy pays an annual dividend of $1.32 per share and has a dividend yield of 3.5%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 8.6%. Viper Energy pays out 54.5% of its earnings in the form of a dividend. Granite Ridge Resources pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current ratings for Viper Energy and Granite Ridge Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Viper Energy	0	2	15	0	2.88
Granite Ridge Resources	1	2	1	0	2.00

Viper Energy currently has a consensus target price of $54.27, indicating a potential upside of 44.52%. Granite Ridge Resources has a consensus target price of $8.00, indicating a potential upside of 55.49%. Given Granite Ridge Resources’ higher possible upside, analysts clearly believe Granite Ridge Resources is more favorable than Viper Energy.

Profitability

This table compares Viper Energy and Granite Ridge Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Viper Energy	20.62%	3.09%	2.55%
Granite Ridge Resources	8.38%	12.16%	7.19%

Summary

Viper Energy beats Granite Ridge Resources on 10 of the 16 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 Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.