Kimbell Royalty Partners: Sustained Acquisition, Cash Distribution, And Good Valuation; Reiterate Buy
Summary
- Kimbell Royalty Partners stands out for revenue stability, robust cash flow, and a high-margin, acquisition-driven business model in a volatile energy market.
- Recent acquisitions, especially in the Midland Basin, boosted production volume and natural gas revenues, offsetting oil market weakness and supporting sustainable distributions.
- KRP's balance sheet is strong, with low net debt/EBITDA and ample cash, enabling continued acquisitions and reliable cash distributions to investors.
- The stock is undervalued, with a 28% upside potential, and technical indicators suggest a bullish entry point; I reiterate my buy rating.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of KRP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.