Critical Survey: Royale Energy (OTCMKTS:ROYL) vs. Kimbell Royalty Partners (NYSE:KRP)

Royale Energy (OTCMKTS:ROYL) and Kimbell Royalty Partners (NYSE:KRP) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for Royale Energy and Kimbell Royalty Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royale Energy	0	0	0	0	0.00
Kimbell Royalty Partners	1	2	1	0	2.00

Kimbell Royalty Partners has a consensus price target of $18.25, indicating a potential upside of 36.62%. Given Kimbell Royalty Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Kimbell Royalty Partners is more favorable than Royale Energy.

Risk and Volatility

Royale Energy has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500. Comparatively, Kimbell Royalty Partners has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Insider and Institutional Ownership

25.8% of Kimbell Royalty Partners shares are owned by institutional investors. 61.8% of Royale Energy shares are owned by insiders. Comparatively, 5.6% of Kimbell Royalty Partners shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Royale Energy and Kimbell Royalty Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royale Energy	-145.31%	N/A	N/A
Kimbell Royalty Partners	11.33%	5.82%	3.05%

Valuation & Earnings

This table compares Royale Energy and Kimbell Royalty Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royale Energy	$2.16 million	1.36	-$1.83 million	($0.05)	-0.83
Kimbell Royalty Partners	$310.65 million	4.11	$66.54 million	($0.11)	-121.44

Kimbell Royalty Partners has higher revenue and earnings than Royale Energy. Kimbell Royalty Partners is trading at a lower price-to-earnings ratio than Royale Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Kimbell Royalty Partners beats Royale Energy on 12 of the 14 factors compared between the two stocks.

About Royale Energy

Royale Energy, Inc. acquires, explores for, develops, produces, and sells oil and natural gas properties in the United States. Its principal operations are located in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana, and Colorado. Royale Energy, Inc. was incorporated in 1986 and is based in El Cajon, California.

About Kimbell Royalty Partners

Kimbell Royalty Partners, LP, together with its subsidiaries, engages in acquiring and owning mineral and royalty interests in oil and natural gas properties in the United States. It serves as the general partner of the company. The company was incorporated in 2015 and is based in Fort Worth, Texas.