Critical Contrast: Kimbell Royalty Partners (NYSE:KRP) & Royale Energy (OTCMKTS:ROYL)

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

Profitability

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

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

Earnings & Valuation

This table compares Kimbell Royalty Partners and Royale Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kimbell Royalty Partners	$324.31 million	4.46	$66.54 million	$0.51	29.68
Royale Energy	$2.16 million	1.31	-$1.83 million	($0.05)	-0.80

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

Insider & Institutional Ownership

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

Risk & Volatility

Kimbell Royalty Partners has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Royale Energy has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Kimbell Royalty Partners and Royale Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kimbell Royalty Partners	1	0	2	1	2.75
Royale Energy	0	0	0	0	0.00

Kimbell Royalty Partners currently has a consensus target price of $20.25, suggesting a potential upside of 33.80%. Given Kimbell Royalty Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe Kimbell Royalty Partners is more favorable than Royale Energy.

Summary

Kimbell Royalty Partners beats Royale Energy on 14 of the 15 factors compared between the two stocks.

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.

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.