Reviewing InterOil (IOC) and Kimbell Royalty (KRP)

InterOil (NYSE: IOC) and Kimbell Royalty (NYSE:KRP) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitabiliy, dividends, earnings, institutional ownership and risk.

Valuation & Earnings

This table compares InterOil and Kimbell Royalty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
InterOil N/A N/A N/A ($3.70) -13.07
Kimbell Royalty $7.72 million 32.88 $3.11 million N/A N/A

Kimbell Royalty has higher revenue and earnings than InterOil.

Institutional & Insider Ownership

46.6% of InterOil shares are owned by institutional investors. Comparatively, 20.4% of Kimbell Royalty shares are owned by institutional investors. 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 InterOil and Kimbell Royalty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
InterOil 0 1 0 0 2.00
Kimbell Royalty 0 0 4 1 3.20

InterOil presently has a consensus target price of $52.00, indicating a potential upside of 7.53%. Kimbell Royalty has a consensus target price of $22.75, indicating a potential upside of 46.40%. Given Kimbell Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Kimbell Royalty is more favorable than InterOil.

Profitability

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

Net Margins Return on Equity Return on Assets
InterOil -233.48% -14.08% -8.85%
Kimbell Royalty N/A N/A N/A

Dividends

Kimbell Royalty pays an annual dividend of $1.20 per share and has a dividend yield of 7.7%. InterOil does not pay a dividend.

Summary

Kimbell Royalty beats InterOil on 9 of the 10 factors compared between the two stocks.

InterOil Company Profile

InterOil Corporation (InterOil) is an oil and gas business with a sole focus on Papua New Guinea (PNG). The Company’s segments include Upstream and Corporate. The Upstream segment includes exploration, appraisal and development of hydrocarbon structures in PNG. The Corporate segment provides support to the Company’s other business segments through business development and improvement activities, general services, administration, human resources, executive management, financing and treasury, government affairs and investor relations. InterOil holds interests across over four exploration and approximately two production retention licenses in the Eastern Papuan Basin of Papua New Guinea. Its assets include the Elk, Antelope, Triceratops, Raptor and Bobcat fields in the Gulf Province of Papua New Guinea, and exploration licenses covering approximately 16,000 square kilometers (over four million acres) in Papua New Guinea.

Kimbell Royalty Company Profile

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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