Reviewing PetroChina (PTR) and Viper Energy Partners (VNOM)

PetroChina (NYSE:PTR) and Viper Energy Partners (NASDAQ:VNOM) are both oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Dividends

PetroChina pays an annual dividend of $1.21 per share and has a dividend yield of 2.1%. Viper Energy Partners pays an annual dividend of $1.52 per share and has a dividend yield of 5.0%. PetroChina pays out 28.1% of its earnings in the form of a dividend. Viper Energy Partners pays out 140.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

0.2% of PetroChina shares are owned by institutional investors. Comparatively, 33.3% of Viper Energy Partners shares are owned by institutional investors. 0.3% of Viper Energy Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for PetroChina and Viper Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PetroChina 0 3 5 0 2.63
Viper Energy Partners 0 0 13 1 3.07

PetroChina presently has a consensus price target of $87.56, suggesting a potential upside of 50.71%. Viper Energy Partners has a consensus price target of $42.54, suggesting a potential upside of 39.75%. Given PetroChina’s higher possible upside, analysts plainly believe PetroChina is more favorable than Viper Energy Partners.

Volatility & Risk

PetroChina has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Viper Energy Partners has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Earnings and Valuation

This table compares PetroChina and Viper Energy Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PetroChina $348.77 billion 0.30 $7.95 billion $4.30 13.51
Viper Energy Partners $288.82 million 14.23 $143.95 million $1.08 28.19

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

Profitability

This table compares PetroChina and Viper Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PetroChina 2.35% 3.84% 2.21%
Viper Energy Partners 46.62% 2.33% 1.88%

Summary

Viper Energy Partners beats PetroChina on 10 of the 17 factors compared between the two stocks.

About PetroChina

PetroChina Company Limited, together with its subsidiaries, engages in a range of petroleum related products, services, and activities in Mainland China and internationally. It operates through Exploration and Production, Refining and Chemicals, Marketing, and Natural Gas and Pipeline segments. The Exploration and Production segment engages in the exploration, development, production, and marketing of crude oil and natural gas. The Refining and Chemicals segment refines crude oil and petroleum products; and produces and markets primary petrochemical products, derivative petrochemical products, and other chemical products. The Marketing segment is involved in marketing of refined products and trading business. The Natural Gas and Pipeline segment engages in the transmission of natural gas, crude oil, and refined products; and sale of natural gas. As of December 31, 2018, the company had a total length of 83,527 km, including 51,751 km of natural gas pipelines, 20,048 km of crude oil pipelines, and 11,728 km of refined product pipelines. It is also involved in the exploration, development, and production of oil sands and coalbed methane; trading of crude oil and petrochemical products; storage, chemical engineering, storage facilities, service station, and transportation facilities and related businesses; import and export of goods and technology; and import and export agency business, as well as provision of technology promotion, professional contractor, and main contractor services. The company was founded in 1988 and is headquartered in Beijing, the People's Republic of China. PetroChina Company Limited is a subsidiary of China National Petroleum Corporation.

About Viper Energy Partners

Viper Energy Partners LP owns, acquires, and exploits oil and natural gas properties in North America. As of December 31, 2018, it had mineral interests in 14,841 net royalty acres in the Permian Basin and Eagle Ford Shale with estimated proved oil and natural gas reserves of 63,136 thousand barrels of crude oil equivalent. Viper Energy Partners GP LLC operates as the general partner of the company. The company was founded in 2013 and is based in Midland, Texas.

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