Critical Analysis: Isramco (ISRL) and Viper Energy Partners (VNOM)
Isramco (NASDAQ: ISRL) and Viper Energy Partners (NASDAQ:VNOM) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.
Risk & Volatility
Isramco has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Viper Energy Partners has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.
Viper Energy Partners pays an annual dividend of $1.84 per share and has a dividend yield of 7.9%. Isramco does not pay a dividend. Viper Energy Partners pays out 173.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of current recommendations and price targets for Isramco and Viper Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||0||11||1||3.08|
Viper Energy Partners has a consensus target price of $25.50, indicating a potential upside of 8.97%. Given Viper Energy Partners’ higher possible upside, analysts clearly believe Viper Energy Partners is more favorable than Isramco.
This table compares Isramco and Viper Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Viper Energy Partners||64.80%||13.92%||13.02%|
Insider & Institutional Ownership
4.7% of Isramco shares are held by institutional investors. Comparatively, 26.0% of Viper Energy Partners shares are held by institutional investors. 73.3% of Isramco shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Isramco and Viper Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Isramco||$54.94 million||5.07||$6.74 million||N/A||N/A|
|Viper Energy Partners||$172.03 million||15.49||$111.47 million||$1.06||22.08|
Viper Energy Partners has higher revenue and earnings than Isramco.
Viper Energy Partners beats Isramco on 11 of the 14 factors compared between the two stocks.
Isramco Company Profile
Isramco, Inc., together with its subsidiaries, is an independent oil and natural gas company. The Company is engaged in the exploration, development and production of oil and natural gas properties located onshore in the United States and offshore Israel. The Company operates through two segments: Oil and Gas Exploration and Production Segment, and Production services Segment. The Company also operates a production services company that provides a range of onshore production services to oil companies, and independent oil and natural gas production companies conducting operations in the United States. The Oil and Gas Exploration and Production Segment is engaged in the exploration and production of natural gas, crude oil, condensate and natural gas liquids (NGLs). The Production services Segment is engaged in rig-based and workover services, well completion and recompletion services, plugging and abandonment of wells and other ancillary oilfield services.
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.
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