Minerals Companies: BSM, KRP, STR, VNOM

[dan_s]

I have updated the forecast models for all four of these companies that are in our High Yield Income Portfolio. They are safe and pay out a high percentage of their operating cash flow. They reported solid Q3 results, and they all have lots of Running Room.

BSM is an MLP that is heavily weighted to natural gas. It has a pristine balance sheet (virtually debt free) and they have a good hedging program that reduces risk even further.

KRP is a partnership that has elected to be taxed as a C-Corp. It has the highest after-tax dividend yield. On a Boe basis production mix is 52% natural gas, 30% oil and 18% NGLs. Oil sales are 67% of 2024 revenues.

STR has a good production mix: 50% oil, 28% natural gas and 22% NGLs. Merger with Brigham Minerals that closed 12/29/2022 was a "Game Changer" for this company.

VNOM is now a C-Corp. Viper's relationship with Diamondback Energy is why it is my Top Pick for growth. Dividends should be ramping up in 2025.

We will be sending out updated profiles on them late in November or early December.