Dorchester Minerals (NASDAQ:DMLP) and Falcon Minerals (NASDAQ:FLMN) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares Dorchester Minerals and Falcon Minerals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dorchester Minerals 71.35% 51.58% 49.92%
Falcon Minerals 31.57% 10.79% 9.61%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Dorchester Minerals and Falcon Minerals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dorchester Minerals 0 0 0 0 N/A
Falcon Minerals 0 1 8 0 2.89

Falcon Minerals has a consensus price target of $9.87, suggesting a potential upside of 55.96%. Given Falcon Minerals’ higher possible upside, analysts clearly believe Falcon Minerals is more favorable than Dorchester Minerals.

Institutional & Insider Ownership

18.2% of Dorchester Minerals shares are owned by institutional investors. Comparatively, 40.8% of Falcon Minerals shares are owned by institutional investors. 9.4% of Dorchester Minerals shares are owned by insiders. Comparatively, 15.8% of Falcon Minerals shares are owned by 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

Dorchester Minerals pays an annual dividend of $2.06 per share and has a dividend yield of 11.8%. Falcon Minerals pays an annual dividend of $0.70 per share and has a dividend yield of 11.1%. Falcon Minerals pays out 350.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dorchester Minerals has raised its dividend for 2 consecutive years. Dorchester Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Dorchester Minerals and Falcon Minerals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dorchester Minerals $73.28 million 8.26 $51.94 million N/A N/A
Falcon Minerals $97.20 million 5.59 $90.13 million $0.20 31.65

Falcon Minerals has higher revenue and earnings than Dorchester Minerals.

Volatility & Risk

Dorchester Minerals has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Falcon Minerals has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Summary

Dorchester Minerals beats Falcon Minerals on 8 of the 15 factors compared between the two stocks.

About Dorchester Minerals

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of producing and nonproducing natural gas and crude oil royalty, net profits, and leasehold interests in the United States. The company's royalty properties consist of producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests located in 574 counties and parishes in 25 states; and net profits interests represent net profits overriding royalty interests in various properties owned by the operating partnership. Dorchester Minerals Management LP serves as the general partner of Dorchester Minerals, L.P. The company was founded in 1982 and is based in Dallas, Texas.

About Falcon Minerals

Falcon Minerals Corporation acquires and owns mineral, royalty, and over-riding royalty interests in oil and natural gas properties in North America. It owns interests covering approximately 256,000 gross unit acres in the Eagle Ford Shale and Austin Chalk in Karnes, DeWitt, and Gonzales Counties in Texas, as well as approximately 68,000 gross unit acres in Pennsylvania, Ohio, and West Virginia that is prospective for the Marcellus Shale. The company is based in Philadelphia, Pennsylvania.

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