Contrasting Statoil ASA (STO) and Kimbell Royalty (KRP)

Statoil ASA (NYSE: STO) and Kimbell Royalty (NYSE:KRP) are both oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Insider & Institutional Ownership

5.0% of Statoil ASA shares are held by institutional investors. Comparatively, 18.4% of Kimbell Royalty shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Statoil ASA pays an annual dividend of $0.70 per share and has a dividend yield of 3.5%. Kimbell Royalty pays an annual dividend of $1.20 per share and has a dividend yield of 7.2%. Statoil ASA pays out -291.7% of its earnings in the form of a dividend. Kimbell Royalty has raised its dividend for 4 consecutive years. Kimbell Royalty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Statoil ASA and Kimbell Royalty’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Statoil ASA $55.12 billion 1.19 $18.51 billion ($0.24) -84.16
Kimbell Royalty $14.63 million 18.84 $7.45 million N/A N/A

Statoil ASA has higher revenue and earnings than Kimbell Royalty.

Profitability

This table compares Statoil ASA and Kimbell Royalty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Statoil ASA -1.32% 5.61% 1.93%
Kimbell Royalty N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and price targets for Statoil ASA and Kimbell Royalty, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Statoil ASA 3 8 3 0 2.00
Kimbell Royalty 0 0 5 1 3.17

Statoil ASA presently has a consensus price target of $17.67, indicating a potential downside of 12.54%. Kimbell Royalty has a consensus price target of $21.83, indicating a potential upside of 30.66%. Given Kimbell Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Kimbell Royalty is more favorable than Statoil ASA.

Summary

Kimbell Royalty beats Statoil ASA on 9 of the 14 factors compared between the two stocks.

About Statoil ASA

Statoil ASA (Statoil) is an energy company. The Company is engaged in oil and gas exploration and production activities. The Company’s segments include Development and Production Norway (DPN), Development and Production International (DPI), Marketing, Midstream and Processing (MMP) and Other. DPN segment manages the Company’s upstream activities on the Norwegian continental shelf (NCS) and explores for and extracts crude oil, natural gas and natural gas liquids. DPI segment manages the Company’s upstream activities that are not included in the DPN and Development and Production USA (DPUSA) business areas. MMP segment manages its marketing and trading activities related to oil products and natural gas, transportation, processing and manufacturing, and the development of oil and gas. Other segment includes activities in New Energy Solutions (NES), Technology, Projects and Drilling (TPD), Global Strategy and Business Development (GSB), and Corporate staffs and support functions.

About Kimbell Royalty

Kimbell Royalty Partners, LP owns and acquires mineral and royalty interests in oil and natural gas properties throughout the United States. As of December 31, 2015, the Company owned mineral and royalty interests in approximately 3.7 million gross acres and overriding royalty interests in approximately 0.9 million gross acres, with approximately 44% of its acres located in the Permian Basin. As of December 31, 2015, the Company’s mineral and royalty interests were located in 20 states and in every onshore basin across the continental United States, and included ownership in over 48,000 gross producing wells, including over 29,000 wells in the Permian Basin. The Company’s properties include Permian Basin, Mid-Continent, Terryville/Cotton Valley/Haynesville, Eagle Ford, Barnett Shale/Fort Worth Basin, Bakken/Williston Basin, San Juan Basin, Onshore California, DJ Basin/Rockies/Niobrara, Illinois Basin and others.

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