Head-To-Head Analysis: Viper Energy Partners (NASDAQ:VNOM) and Apache (NASDAQ:APA)

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Viper Energy Partners (NASDAQ:VNOM) and Apache (NYSE:APA) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Viper Energy Partners and Apache, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Viper Energy Partners 0 0 16 2 3.11
Apache 5 11 3 0 1.89

Viper Energy Partners currently has a consensus target price of $40.53, suggesting a potential upside of 53.52%. Apache has a consensus target price of $34.17, suggesting a potential upside of 47.27%. Given Viper Energy Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Viper Energy Partners is more favorable than Apache.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Viper Energy Partners $288.82 million 12.34 $143.95 million $1.08 24.44
Apache $7.42 billion 1.17 $40.00 million $1.77 13.11

Viper Energy Partners has higher earnings, but lower revenue than Apache. Apache 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.

Dividends

Viper Energy Partners pays an annual dividend of $1.88 per share and has a dividend yield of 7.1%. Apache pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. Viper Energy Partners pays out 174.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apache pays out 56.5% of its earnings in the form of a dividend. Viper Energy Partners has increased its dividend for 2 consecutive years. Viper Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Viper Energy Partners has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Apache has a beta of 1.84, indicating that its stock price is 84% more volatile than the S&P 500.

Institutional & Insider Ownership

38.8% of Viper Energy Partners shares are held by institutional investors. Comparatively, 95.3% of Apache shares are held by institutional investors. 0.3% of Viper Energy Partners shares are held by company insiders. Comparatively, 0.7% of Apache shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Viper Energy Partners 13.18% 0.62% 0.52%
Apache -10.12% 5.12% 2.03%

Summary

Viper Energy Partners beats Apache on 10 of the 18 factors compared between the two stocks.

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.

About Apache

Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids (NGLs). The company has operations in onshore assets located in the Permian and Midcontinent/Gulf Coast onshore regions; and offshore assets situated in the Gulf of Mexico region. It also holds onshore assets in Egypt's Western desert; and offshore assets in the North Sea region, including the United Kingdom. In addition, the company has an offshore exploration program in Suriname. As of December 31, 2018, it had total estimated proved reserves of 581 million barrels of crude oil, 234 million barrels of NGLs, and 2.5 trillion cubic feet of natural gas. Apache Corporation was founded in 1954 and is based in Houston, Texas.

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