Head to Head Contrast: Kimbell Royalty (NYSE:KRP) & Epsilon Energy (NASDAQ:EPSN)

Epsilon Energy (NASDAQ:EPSN) and Kimbell Royalty (NYSE:KRP) are both small-cap energy companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Dividends

Epsilon Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.2%. Kimbell Royalty pays an annual dividend of $1.88 per share and has a dividend yield of 11.9%. Epsilon Energy pays out -119.0% of its earnings in the form of a dividend. Kimbell Royalty pays out 223.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Epsilon Energy has a beta of -0.06, indicating that its share price is 106% less volatile than the S&P 500. Comparatively, Kimbell Royalty has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.

Insider and Institutional Ownership

60.3% of Epsilon Energy shares are held by institutional investors. Comparatively, 25.8% of Kimbell Royalty shares are held by institutional investors. 28.4% of Epsilon Energy shares are held by company insiders. Comparatively, 5.6% of Kimbell Royalty shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Epsilon Energy and Kimbell Royalty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Epsilon Energy	0	1	0	0	2.00
Kimbell Royalty	0	1	4	1	3.00

Kimbell Royalty has a consensus target price of $18.25, suggesting a potential upside of 15.69%. Given Kimbell Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Kimbell Royalty is more favorable than Epsilon Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Epsilon Energy	-3.77%	5.56%	3.26%
Kimbell Royalty	27.17%	14.95%	7.41%

Valuation and Earnings

This table compares Epsilon Energy and Kimbell Royalty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Epsilon Energy	$67.66 million	2.66	-$5.80 million	($0.21)	-28.29
Kimbell Royalty	$344.86 million	5.25	$90.95 million	$0.84	18.78

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

Summary

Kimbell Royalty beats Epsilon Energy on 14 of the 17 factors compared between the two stocks.

About Epsilon Energy

Epsilon Energy Ltd., a North American onshore independent natural gas and oil company, engages in the acquisition, development, gathering, and production of natural oil and gas reserves in the United States. The company operates through Upstream and Gathering System segments. It has natural gas production in the Marcellus Shale in Pennsylvania; and oil, natural gas liquids, and natural gas production in the Permian Basin in Texas and New Mexico, and Anadarko Basin in Oklahoma. Epsilon Energy Ltd. was incorporated in 2005 and is based in Calgary, Canada.

About Kimbell Royalty

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.