TXO Partners (NYSE:TXO) vs. Vitesse Energy (NYSE:VTS) Critical Analysis

Vitesse Energy (NYSE:VTS) and TXO Partners (NYSE:TXO) are both small-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Risk and Volatility

Vitesse Energy has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, TXO Partners has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500.

Profitability

This table compares Vitesse Energy and TXO Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vitesse Energy	10.92%	7.87%	5.77%
TXO Partners	-61.27%	7.94%	5.76%

Institutional & Insider Ownership

51.6% of Vitesse Energy shares are owned by institutional investors. Comparatively, 27.4% of TXO Partners shares are owned by institutional investors. 15.8% of Vitesse Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Vitesse Energy and TXO Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vitesse Energy	0	0	3	0	3.00
TXO Partners	0	0	1	1	3.50

Vitesse Energy presently has a consensus target price of $28.50, indicating a potential upside of 19.40%. TXO Partners has a consensus target price of $26.00, indicating a potential upside of 30.00%. Given TXO Partners’ stronger consensus rating and higher probable upside, analysts plainly believe TXO Partners is more favorable than Vitesse Energy.

Valuation and Earnings

This table compares Vitesse Energy and TXO Partners’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vitesse Energy	$233.90 million	3.01	-$19.74 million	$0.84	28.42
TXO Partners	$380.72 million	1.63	-$103.99 million	($5.85)	-3.42

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

Dividends

Vitesse Energy pays an annual dividend of $2.10 per share and has a dividend yield of 8.8%. TXO Partners pays an annual dividend of $2.60 per share and has a dividend yield of 13.0%. Vitesse Energy pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TXO Partners pays out -44.4% of its earnings in the form of a dividend. TXO Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Vitesse Energy beats TXO Partners on 10 of the 17 factors compared between the two stocks.

About Vitesse Energy

Vitesse Energy, Inc., together with its subsidiaries, engages in the acquisition, development, and production of non-operated oil and natural gas properties in the United States. It owns and acquires non-operated working interest and royalty interest ownership in the Williston Basin properties located in North Dakota and Montana. The company also owns non-operated interests in the Central Rockies properties located in Colorado and Wyoming. Vitesse Energy, Inc. was founded in 2014 and is based in Centennial, Colorado.

About TXO Partners

TXO Partners, L.P., an oil and natural gas company, focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The company was formerly known as TXO Energy Partners, L.P. and changed its name to TXO Partners, L.P. in May 2023. TXO Partners, L.P. was incorporated in 2012 and is based in Fort Worth, Texas.