Critical Review: Kimbell Royalty Partners (NYSE:KRP) and Blue Dolphin Energy (OTCMKTS:BDCO)

Blue Dolphin Energy (OTCMKTS:BDCO) and Kimbell Royalty Partners (NYSE:KRP) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Institutional & Insider Ownership

25.8% of Kimbell Royalty Partners shares are held by institutional investors. 87.5% of Blue Dolphin Energy shares are held by company insiders. Comparatively, 5.6% of Kimbell Royalty Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blue Dolphin Energy	4.34%	39.12%	15.23%
Kimbell Royalty Partners	10.74%	5.03%	2.66%

Risk and Volatility

Blue Dolphin Energy has a beta of -0.02, indicating that its share price is 102% less volatile than the S&P 500. Comparatively, Kimbell Royalty Partners has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Blue Dolphin Energy and Kimbell Royalty Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blue Dolphin Energy	0	0	0	0	N/A
Kimbell Royalty Partners	1	0	4	1	2.83

Kimbell Royalty Partners has a consensus price target of $20.67, indicating a potential upside of 26.79%. Given Kimbell Royalty Partners’ higher possible upside, analysts clearly believe Kimbell Royalty Partners is more favorable than Blue Dolphin Energy.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blue Dolphin Energy	$396.05 million	0.16	$31.01 million	$1.40	3.06
Kimbell Royalty Partners	$321.86 million	4.84	$66.54 million	$0.60	27.17

Kimbell Royalty Partners has lower revenue, but higher earnings than Blue Dolphin Energy. Blue Dolphin 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.

Summary

Kimbell Royalty Partners beats Blue Dolphin Energy on 9 of the 14 factors compared between the two stocks.

About Blue Dolphin Energy

Blue Dolphin Energy Company, an independent downstream energy company, engages in the refining and marketing of petroleum products in the United States. It operates through two segments, Refinery Operations, and Tolling and Terminaling. The company produces finished products, including jet fuel, as well as various intermediate products, such as naphtha, heavy oil mud blendstock, and atmospheric gas oil; and conducts tolling and terminaling services at the Nixon facility. It also provides storage tank rentals and ancillary services. The company was incorporated in 1986 and is headquartered in Houston, Texas. Blue Dolphin Energy Company is a subsidiary of Lazarus Energy Holdings, LLC.

About Kimbell Royalty Partners

Kimbell Royalty Partners, LP, together with its subsidiaries, engages in acquiring and owning mineral and royalty interests in oil and natural gas properties in the United States. It serves as the general partner of the company. The company was incorporated in 2015 and is based in Fort Worth, Texas.