Critical Review: Kimbell Royalty (KRP) & PetroChina (PTR)

PetroChina (NYSE: PTR) and Kimbell Royalty (NYSE:KRP) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Earnings and Valuation

This table compares PetroChina 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
PetroChina $243.50 billion 0.53 $1.18 billion $1.96 35.68
Kimbell Royalty N/A N/A -$80,000.00 N/A N/A

PetroChina has higher revenue and earnings than Kimbell Royalty.

Dividends

PetroChina pays an annual dividend of $1.39 per share and has a dividend yield of 2.0%. Kimbell Royalty pays an annual dividend of $1.24 per share and has a dividend yield of 7.6%. PetroChina pays out 70.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

0.2% of PetroChina shares are held by institutional investors. Comparatively, 21.8% of Kimbell Royalty shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for PetroChina and Kimbell Royalty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PetroChina 0 4 4 0 2.50
Kimbell Royalty 0 0 5 1 3.17

Kimbell Royalty has a consensus price target of $21.33, suggesting a potential upside of 31.28%. Given Kimbell Royalty’s stronger consensus rating and higher possible upside, analysts clearly believe Kimbell Royalty is more favorable than PetroChina.

Profitability

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

Net Margins Return on Equity Return on Assets
PetroChina 1.22% 2.08% 1.20%
Kimbell Royalty N/A 3.00% 2.82%

Summary

Kimbell Royalty beats PetroChina on 9 of the 12 factors compared between the two stocks.

About PetroChina

PetroChina Company Limited is a China-based company principally engaged in the production and distribution of oil and gas. The Company mainly operates through four business segments. The Exploration and Production segment is principally engaged in the exploration, development, production and sales of crude oil and natural gas. The Refining and Chemical Products segment is principally engaged in the refining of crude oil and petroleum products, as well as the production and sales of basic petrochemical products, derivative petrochemical products and other chemical products. The Sales segment is principally engaged in the sales of refined petroleum products. The Natural Gas and Pipeline segment is engaged in the transportation and sales of natural gas, crude oil and refined petroleum products.

About Kimbell Royalty

Kimbell Royalty Partners, LP owns and acquires mineral and royalty interests in oil and natural gas properties throughout the United States. As of December 31, 2015, the Company owned mineral and royalty interests in approximately 3.7 million gross acres and overriding royalty interests in approximately 0.9 million gross acres, with approximately 44% of its acres located in the Permian Basin. As of December 31, 2015, the Company’s mineral and royalty interests were located in 20 states and in every onshore basin across the continental United States, and included ownership in over 48,000 gross producing wells, including over 29,000 wells in the Permian Basin. The Company’s properties include Permian Basin, Mid-Continent, Terryville/Cotton Valley/Haynesville, Eagle Ford, Barnett Shale/Fort Worth Basin, Bakken/Williston Basin, San Juan Basin, Onshore California, DJ Basin/Rockies/Niobrara, Illinois Basin and others.

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