Reviewing Viper Energy Partners (VNOM) & Pioneer Natural Resources (PXD)
Viper Energy Partners (NASDAQ: VNOM) and Pioneer Natural Resources (NYSE:PXD) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
This is a breakdown of current ratings for Viper Energy Partners and Pioneer Natural Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||1||8||1||3.00|
|Pioneer Natural Resources||0||4||21||0||2.84|
Viper Energy Partners currently has a consensus target price of $21.89, indicating a potential upside of 10.49%. Pioneer Natural Resources has a consensus target price of $194.69, indicating a potential upside of 29.54%. Given Pioneer Natural Resources’ higher probable upside, analysts plainly believe Pioneer Natural Resources is more favorable than Viper Energy Partners.
Valuation & Earnings
This table compares Viper Energy Partners and Pioneer Natural Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Viper Energy Partners||$79.15 million||28.50||-$10.89 million||$0.88||22.51|
|Pioneer Natural Resources||$3.82 billion||6.78||-$556.00 million||$0.72||211.58|
Viper Energy Partners has higher revenue, but lower earnings than Pioneer Natural Resources. Viper Energy Partners is trading at a lower price-to-earnings ratio than Pioneer Natural Resources, indicating that it is currently the more affordable of the two stocks.
Viper Energy Partners pays an annual dividend of $1.33 per share and has a dividend yield of 6.7%. Pioneer Natural Resources pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Viper Energy Partners pays out 151.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pioneer Natural Resources pays out 11.1% of its earnings in the form of a dividend.
Institutional and Insider Ownership
15.6% of Viper Energy Partners shares are held by institutional investors. Comparatively, 91.9% of Pioneer Natural Resources shares are held by institutional investors. 0.9% of Pioneer Natural Resources shares are held by insiders. 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.
Volatility & Risk
Viper Energy Partners has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Pioneer Natural Resources has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.
This table compares Viper Energy Partners and Pioneer Natural Resources’ 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%|
|Pioneer Natural Resources||2.17%||2.34%||1.51%|
Viper Energy Partners beats Pioneer Natural Resources on 10 of the 17 factors compared between the two stocks.
Viper Energy Partners Company Profile
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.
Pioneer Natural Resources Company Profile
Pioneer Natural Resources Company is an oil and gas exploration and production company. The Company explores for, develops and produces oil, natural gas liquids (NGLs) and gas within the United States, with operations primarily in the Permian Basin in West Texas, the Eagle Ford Shale play in South Texas, the Raton field in southeast Colorado and the West Panhandle field in the Texas Panhandle. As of December 31, 2016, the Company owned interests in eight gas processing plants and nine treating facilities. As of December 31, 2016, its Spraberry/Wolfcamp field covered approximately 800,000 gross acres (690,000 net acres). The Company completed 12 Eagle Ford Shale wells during the fiscal year ended December 31, 2016. As of December 31, 2016, the Company owned approximately 185,000 gross acres (165,000 net acres) in the center of the Raton Basin. As of December 31, 2016, the Company’s gas had an average energy content of 1,400 British thermal unit (Btu).
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