Critical Analysis: Viper Energy Partners (NASDAQ:VNOM) vs. W&T Offshore (NASDAQ:WTI)
Viper Energy Partners (NASDAQ:VNOM) and W&T Offshore (NYSE:WTI) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.
Institutional and Insider Ownership
38.9% of Viper Energy Partners shares are owned by institutional investors. Comparatively, 59.1% of W&T Offshore shares are owned by institutional investors. 0.3% of Viper Energy Partners shares are owned by company insiders. Comparatively, 33.6% of W&T Offshore shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares Viper Energy Partners and W&T Offshore’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Viper Energy Partners||13.18%||0.62%||0.52%|
Viper Energy Partners pays an annual dividend of $1.88 per share and has a dividend yield of 6.3%. W&T Offshore does not pay a dividend. Viper Energy Partners pays out 174.1% 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 raised its dividend for 2 consecutive years and W&T Offshore has raised its dividend for 7 consecutive years.
This is a summary of recent ratings and recommmendations for Viper Energy Partners and W&T Offshore, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||0||14||2||3.13|
Viper Energy Partners currently has a consensus target price of $41.33, suggesting a potential upside of 37.55%. W&T Offshore has a consensus target price of $10.50, suggesting a potential upside of 131.79%. Given W&T Offshore’s higher probable upside, analysts clearly believe W&T Offshore is more favorable than Viper Energy Partners.
Risk & Volatility
Viper Energy Partners has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 2.96, meaning that its stock price is 196% more volatile than the S&P 500.
Earnings & Valuation
This table compares Viper Energy Partners and W&T Offshore’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Viper Energy Partners||$288.82 million||14.05||$143.95 million||$1.08||27.82|
|W&T Offshore||$580.71 million||1.10||$248.83 million||$1.01||4.49|
W&T Offshore has higher revenue and earnings than Viper Energy Partners. W&T Offshore 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.
W&T Offshore beats Viper Energy Partners on 10 of the 18 factors compared between the two stocks.
About Viper Energy Partners
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.
About W&T Offshore
W&T Offshore, Inc., an independent oil and natural gas producer, acquires, explores for, and develops oil and natural gas properties in the Gulf of Mexico. The company sells crude oil, natural gas liquids, and natural gas. It holds working interests in approximately 49 offshore fields in federal and state waters. The company also owns interests in approximately 135 offshore structures. It has interests in offshore leases covering approximately 370,000 net acres spanning across the Outer Continental Shelf off the coasts of Louisiana, Texas, Mississippi, and Alabama. As of December 31, 2017, its total proved reserves were 74.2 million barrels of oil equivalent. W&T Offshore, Inc. was founded in 1983 and is headquartered in Houston, Texas.
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