Petroleo Brasileiro SA Petrobras (NYSE: PBR.A) and Kimbell Royalty (NYSE:KRP) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Dividends

Kimbell Royalty pays an annual dividend of $1.24 per share and has a dividend yield of 7.7%. Petroleo Brasileiro SA Petrobras does not pay a dividend.

Profitability

This table compares Petroleo Brasileiro SA Petrobras and Kimbell Royalty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Petroleo Brasileiro SA Petrobras 0.91% 0.41% 0.32%
Kimbell Royalty N/A 3.00% 2.82%

Valuation and Earnings

This table compares Petroleo Brasileiro SA Petrobras and Kimbell Royalty’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Petroleo Brasileiro SA Petrobras $81.41 billion 0.77 -$4.84 billion $0.35 27.63
Kimbell Royalty N/A N/A -$80,000.00 N/A N/A

Kimbell Royalty has lower revenue, but higher earnings than Petroleo Brasileiro SA Petrobras.

Institutional & Insider Ownership

4.4% of Petroleo Brasileiro SA Petrobras shares are held by institutional investors. Comparatively, 21.8% of Kimbell Royalty shares are held by institutional investors. 1.0% of Petroleo Brasileiro SA Petrobras shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Petroleo Brasileiro SA Petrobras and Kimbell Royalty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Petroleo Brasileiro SA Petrobras 0 1 0 0 2.00
Kimbell Royalty 0 0 5 1 3.17

Petroleo Brasileiro SA Petrobras currently has a consensus target price of $10.00, indicating a potential upside of 3.41%. Kimbell Royalty has a consensus target price of $21.33, indicating a potential upside of 32.92%. Given Kimbell Royalty’s stronger consensus rating and higher probable upside, analysts plainly believe Kimbell Royalty is more favorable than Petroleo Brasileiro SA Petrobras.

Summary

Kimbell Royalty beats Petroleo Brasileiro SA Petrobras on 9 of the 12 factors compared between the two stocks.

Petroleo Brasileiro SA Petrobras Company Profile

Petroleo Brasileiro S.A.-Petrobras specializes in the oil, natural gas and energy industry. The Company is engaged in prospecting, drilling, refining, processing, trading and transporting crude oil from producing onshore and offshore oil fields and from shale or other rocks. Its segments include Exploration and Production, which covers the activities of exploration, development and production of crude oil, natural gas liquid and natural gas; Refining, Transportation and Marketing, which covers the refining, logistics, transport and trading of crude oil and oil products activities, exporting of ethanol, and extraction and processing of shale; Gas and Power, which is engaged in transportation and trading of natural gas produced in Brazil and imported natural gas; Biofuels, which covers the activities of production of biodiesel and its co-products, and ethanol-related activities; Distribution, which includes the activities of its subsidiary Petrobras Distribuidora S.A., and Corporate.

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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