Chesapeake Energy (NASDAQ:CHK) and Kimbell Royalty Partners (NYSE:KRP) Head-To-Head Comparison

Kimbell Royalty Partners (NYSE:KRPGet Rating) and Chesapeake Energy (NASDAQ:CHKGet Rating) are both oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Kimbell Royalty Partners pays an annual dividend of $1.88 per share and has a dividend yield of 9.7%. Chesapeake Energy pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. Kimbell Royalty Partners pays out 289.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chesapeake Energy pays out -62.9% of its earnings in the form of a dividend. Kimbell Royalty Partners has raised its dividend for 2 consecutive years. Kimbell Royalty Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

31.5% of Kimbell Royalty Partners shares are owned by institutional investors. 5.6% of Kimbell Royalty Partners shares are owned by insiders. Comparatively, 1.1% of Chesapeake Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kimbell Royalty Partners $135.62 million 9.27 $33.94 million $0.65 29.88
Chesapeake Energy $5.81 billion 2.16 $6.33 billion ($3.18) -31.07

Chesapeake Energy has higher revenue and earnings than Kimbell Royalty Partners. Chesapeake 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.

Analyst Recommendations

This is a summary of current ratings for Kimbell Royalty Partners and Chesapeake Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kimbell Royalty Partners 0 0 3 1 3.25
Chesapeake Energy 0 0 11 0 3.00

Kimbell Royalty Partners presently has a consensus target price of $20.75, suggesting a potential upside of 6.85%. Chesapeake Energy has a consensus target price of $88.50, suggesting a potential downside of 10.42%. Given Kimbell Royalty Partners’ stronger consensus rating and higher probable upside, research analysts plainly believe Kimbell Royalty Partners is more favorable than Chesapeake Energy.

Profitability

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

Net Margins Return on Equity Return on Assets
Kimbell Royalty Partners 27.46% 12.75% 6.30%
Chesapeake Energy -2.03% 27.28% 12.36%

Risk and Volatility

Kimbell Royalty Partners has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500. Comparatively, Chesapeake Energy has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500.

Summary

Kimbell Royalty Partners beats Chesapeake Energy on 12 of the 18 factors compared between the two stocks.

Kimbell Royalty Partners Company Profile (Get Rating)

Kimbell Royalty Partners, LP, together with its subsidiaries, acquires and owns mineral and royalty interests in oil and natural gas properties in the United States. As of December 31, 2021, it owned mineral and royalty interests in approximately 11.4 million gross acres and overriding royalty interests in approximately 4.7 million gross acres. The company's mineral and royalty interests are located in 28 states and include ownership in approximately 122,000 gross wells, including approximately 46,000 wells in the Permian Basin. It serves as the general partner of the company. The company was founded in 2013 and is based in Fort Worth, Texas.

Chesapeake Energy Company Profile (Get Rating)

Chesapeake Energy Corporation, an independent exploration and production company, engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs in the United States. The company holds interests in natural gas resource plays in the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana; and the liquids-rich resource play in the Eagle Ford Shale in South Texas. As of December 31, 2021, it owned interests in approximately 8,200 gross productive wells, including 6,500 wells with working interest and 1,700 wells with an overriding or royalty interest; and had estimated proved reserves of 661 million barrels of oil equivalent. The company was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.

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