Financial Contrast: Kimbell Royalty (NYSE:KRP) versus Paramount Resources (OTCMKTS:PRMRF)

Kimbell Royalty (NYSE:KRP) and Paramount Resources (OTCMKTS:PRMRF) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

25.8% of Kimbell Royalty shares are held by institutional investors. Comparatively, 4.1% of Paramount Resources shares are held by institutional investors. 5.6% of Kimbell Royalty shares are held by company insiders. Comparatively, 36.3% of Paramount Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Kimbell Royalty pays an annual dividend of $1.88 per share and has a dividend yield of 11.5%. Paramount Resources pays an annual dividend of $0.42 per share and has a dividend yield of 1.7%. Kimbell Royalty pays out 223.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Paramount Resources pays out 73.7% of its earnings in the form of a dividend.

Volatility and Risk

Kimbell Royalty has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Paramount Resources has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Kimbell Royalty and Paramount Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kimbell Royalty	0	1	4	1	3.00
Paramount Resources	0	2	4	2	3.00

Kimbell Royalty currently has a consensus target price of $18.25, suggesting a potential upside of 11.48%. Given Kimbell Royalty’s higher possible upside, equities analysts clearly believe Kimbell Royalty is more favorable than Paramount Resources.

Profitability

This table compares Kimbell Royalty and Paramount Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kimbell Royalty	27.17%	14.95%	7.41%
Paramount Resources	12.52%	4.31%	3.20%

Valuation & Earnings

This table compares Kimbell Royalty and Paramount Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kimbell Royalty	$333.83 million	5.62	$90.95 million	$0.84	19.49
Paramount Resources	$692.73 million	5.06	$922.32 million	$0.57	42.13

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

Summary

Kimbell Royalty beats Paramount Resources on 8 of the 15 factors compared between the two stocks.

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.

About Paramount Resources

Paramount Resources Ltd. explores for and develops conventional and unconventional petroleum and natural gas reserves and resources in Canada. The company holds interests in the Karr and Wapiti Montney properties covering an area of 109,000 net acres located south of the city of Grande Prairie, Alberta; Kaybob North Duvernay development and natural gas producing properties covering an area of 124,000 net acres located in west-central Alberta; and Willesden Green Duvernay development in central Alberta and shale gas producing properties in the Horn River Basin in northeast British Columbia covering an area of 249,000 net acres. The company was founded in 1976 and is based in Calgary, Canada.