Viper Energy Partners (NASDAQ: VNOM) and Pengrowth Energy (NYSE:PGH) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Risk & Volatility

Viper Energy Partners has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Pengrowth Energy has a beta of 2.36, indicating that its share price is 136% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Viper Energy Partners and Pengrowth Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viper Energy Partners 0 1 9 1 3.00
Pengrowth Energy 7 1 0 0 1.13

Viper Energy Partners currently has a consensus price target of $21.89, indicating a potential downside of 0.51%. Pengrowth Energy has a consensus price target of $2.19, indicating a potential upside of 175.92%. Given Pengrowth Energy’s higher probable upside, analysts clearly believe Pengrowth Energy is more favorable than Viper Energy Partners.

Profitability

This table compares Viper Energy Partners and Pengrowth Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Viper Energy Partners 60.87% 12.08% 11.11%
Pengrowth Energy -101.66% -38.22% -14.60%

Dividends

Viper Energy Partners pays an annual dividend of $1.35 per share and has a dividend yield of 6.1%. Pengrowth Energy does not pay a dividend. Viper Energy Partners pays out 153.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

27.1% of Viper Energy Partners shares are held by institutional investors. Comparatively, 14.5% of Pengrowth Energy shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Viper Energy Partners and Pengrowth Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Viper Energy Partners $79.15 million 31.65 -$10.89 million $0.88 25.00
Pengrowth Energy $427.50 million 1.02 -$221.80 million ($0.79) -1.00

Viper Energy Partners has higher earnings, but lower revenue than Pengrowth Energy. Pengrowth Energy 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.

Summary

Viper Energy Partners beats Pengrowth Energy on 11 of the 15 factors compared between the two stocks.

About Viper Energy Partners

Viper Energy Partners LP is engaged in owning, acquiring and exploiting oil and natural gas properties in North America. The Company’s assets are located in the Permian Basin of West Texas. As of December 31, 2016, the Permian Basin consisted of approximately 85,000 square miles. As of December 31, 2016, its assets consisted of mineral interests underlying 107,568 gross acres in the Permian Basin. As of December 31, 2016, there were 545 vertical wells and 190 horizontal wells producing on this acreage. As of December 31, 2016, its estimated proved oil and natural gas reserves of its assets was 31,435 thousand barrels of crude oil equivalent (MBOE). As of December 31, 2016, the Company’s proved reserves were approximately 68% oil, 18% natural gas liquids and 14% natural gas. In addition to its mineral interests, the Company owns a minor equity interest in an entity that owns mineral, overriding royalty, net profits, leasehold and other similar interests.

About Pengrowth Energy

Pengrowth Energy Corporation is engaged in the development, production and acquisition of, and the exploration for, oil and natural gas reserves in the provinces of Alberta, British Columbia, Saskatchewan and Nova Scotia. The Lindbergh thermal property is located approximately 420 kilometers north east of Calgary, Alberta and 50 kilometers south of Bonnyville, Alberta. Its Greater Olds/Garrington area is located approximately 100 kilometers north of Calgary, Alberta. It has varied Working Interests within the Swan Hills area in all of the properties throughout this regional Beaverhill Lake resource base. These are both operated and non-operated, unit and non-unit properties in Judy Creek, Carson Creek, House Mountain, Deer Mountain, Swan Hills, South Swan Hills and Freeman. The properties are located approximately 200 kilometers northwest of Edmonton, Alberta. Its Groundbirch property is located approximately 40 kilometers south west of Fort St. John, British Columbia.

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