Viper Energy Partners
Midland, Texas-based Viper Energy Partners L.P. (NASDAQ: VNOM) owns, acquires and exploits oil and natural gas properties in the Permian Basin and Eagle Ford play in Texas. The company was formed by oil and gas producer Diamondback Energy to focus on owning and acquiring mineral and royalty interests in oil-weighted basins. Viper Energy’s assets consist of mineral interests and royalty acreage in the Permian and Eagle Shale.
The company’s market cap is $4.89 billion, and 17 brokerages offer coverage of the partnership’s common units. Of those, 15 have a Buy or Strong Buy rating. Based on a median price target of $36.00, the implied upside is about 23.3%. (These price numbers are coincidentally identical with Crestwood’s, in case you were wondering.)
Viper Energy raised its quarterly distribution by 43% to $0.67 per common unit in the first quarter. The forward yield on the shares is 9.38%, and the company’s payout ratio is 133.93%. The 52-week trading range is $15.98 to $32.35, and Viper’s one-year total return is 75.78%.
Viper’s one-year share price increase was nearly 75%, better than Chevron’s 66.6% increase or Exxon’s 61.3% increase.
Plains All American
Houston-based Plains All American Pipeline L.P. (NYSE: PAA) owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and natural gas liquids (NGLs) producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. Like most midstream MLPs, this one boasts a rather large amount of debt: $9.1 billion in net debt at the end of the March quarter. That is about $1 billion lower than the year-ago total.
This is the largest company in this group, measured by its market cap of $7.58 billion. Its size has attracted coverage from 21 brokerages. Of those, 16 have a Buy or Strong Buy rating on the common units and four have Hold ratings. The upside potential on the stock is nearly 30%, based on a median price target of $14.00.
The company raised its dividend by 15% for the first quarter, and its forward yield is 8.18%. Its payout ratio of 198.88% is tops in this group. The 52-week trading range is $8.64 to $12.38, and the total one-year return is 11.3%.
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