Brigham Minerals (NYSE:MNRL) and Viper Energy Partners (NASDAQ:VNOM) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.
Institutional and Insider Ownership
67.5% of Brigham Minerals shares are held by institutional investors. Comparatively, 36.8% of Viper Energy Partners shares are held by institutional investors. 0.3% of Viper Energy Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Brigham Minerals and Viper Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||2||13||0||2.87|
Brigham Minerals currently has a consensus price target of $23.23, indicating a potential upside of 182.96%. Viper Energy Partners has a consensus price target of $25.40, indicating a potential upside of 285.43%. Given Viper Energy Partners’ higher probable upside, analysts clearly believe Viper Energy Partners is more favorable than Brigham Minerals.
This table compares Brigham Minerals and Viper Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Viper Energy Partners||15.52%||0.67%||0.56%|
Brigham Minerals pays an annual dividend of $1.52 per share and has a dividend yield of 18.5%. Viper Energy Partners pays an annual dividend of $1.80 per share and has a dividend yield of 27.3%. Brigham Minerals pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Viper Energy Partners pays out 1,384.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Viper Energy Partners has increased its dividend for 2 consecutive years. Viper Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Brigham Minerals and Viper Energy Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brigham Minerals||$101.51 million||4.60||$21.64 million||$0.57||14.40|
|Viper Energy Partners||$298.28 million||3.50||$46.28 million||$0.13||50.69|
Viper Energy Partners has higher revenue and earnings than Brigham Minerals. Brigham Minerals 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.
Brigham Minerals Company Profile
Brigham Minerals, Inc. owns and operates a portfolio of mineral and royalty interests in the continental United States. The company primarily holds mineral and royalty interests in the Permian Basin in West Texas and New Mexico; the SCOOP/STACK plays in the Anadarko Basin of Oklahoma; the Denver-Julesburg Basin in Colorado; and Wyoming and the Williston Basin in North Dakota. As of December 31, 2018, it had mineral and royalty interests in approximately 48,100 net mineral acres; and owned mineral and royalty interests in 3,355 gross productive horizontal wells, which consisted of 3,064 oil wells and 291 natural gas wells. The company also had proved undeveloped reserves of 6,923 thousand barrels of oil; 30,062 million cubic feet of natural gas; and 3,220 million barrels of natural gas liquids for a total of 15,153 thousand barrels of oil equivalent. Brigham Minerals, Inc. was founded in 2012 and is based in Austin, Texas.
Viper Energy Partners Company Profile
Viper Energy Partners LP owns, acquires, and exploits oil and natural gas properties in North America. As of December 31, 2018, it had mineral interests in 14,841 net royalty acres in the Permian Basin and Eagle Ford Shale with estimated proved oil and natural gas reserves of 63,136 thousand barrels of crude oil equivalent. Viper Energy Partners GP LLC operates as the general partner of the company. The company was founded in 2013 and is based in Midland, Texas.
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