Kimbell Royalty Partners LP (KRP) Valuation Update - Apr 9
Posted: Sun Apr 09, 2023 1:43 pm
Yesterday (April 8) I finally found enough time to update my forecast/valuation model for KRP and finish the profile update. I have posted the updates to the EPG website home page or you can find them under the High Yield Tab.
KRP closed on April 6 at $15.32
Despite being "gassy", this minerals company is in very good shape and will be reporting a significant increase in production from Q4 to Q1.
I have increased my current valuation by $1.50 to $20.50.
TipRanks: "In the last 3 months, 5 ranked analysts set 12-month price targets for KRP. The average price target among the analysts is $21.40. All 5 analysts rate it a BUY and their price targets range from $19 to $25."
KRP is a limited partnership that has elected to be taxed as a C-Corp., so it is appropriate to put it in an IRA account.
If you are long-term bullish on natural gas prices (like I am), this is definitely one you should take a hard look at. Current production is ~58% natural gas, but with production expected to increase by ~17% year-over-year, they should be able to pay 2023 dividends that total close to $1.38 (per my model) for annualized yield of ~9%. If natural gas prices rebound to $3.50/mcf in 2024, KRP should climb to over $20/share.
With very low maintenance capex, KRP is able to pay out ~75% of operating cash flow as dividends. All four of the minerals/royalties companies in our High Yield Income Portfolio have very low cash expenses.
The KRP profile will be emailed to all of our members on Monday morning.
KRP closed on April 6 at $15.32
Despite being "gassy", this minerals company is in very good shape and will be reporting a significant increase in production from Q4 to Q1.
I have increased my current valuation by $1.50 to $20.50.
TipRanks: "In the last 3 months, 5 ranked analysts set 12-month price targets for KRP. The average price target among the analysts is $21.40. All 5 analysts rate it a BUY and their price targets range from $19 to $25."
KRP is a limited partnership that has elected to be taxed as a C-Corp., so it is appropriate to put it in an IRA account.
If you are long-term bullish on natural gas prices (like I am), this is definitely one you should take a hard look at. Current production is ~58% natural gas, but with production expected to increase by ~17% year-over-year, they should be able to pay 2023 dividends that total close to $1.38 (per my model) for annualized yield of ~9%. If natural gas prices rebound to $3.50/mcf in 2024, KRP should climb to over $20/share.
With very low maintenance capex, KRP is able to pay out ~75% of operating cash flow as dividends. All four of the minerals/royalties companies in our High Yield Income Portfolio have very low cash expenses.
The KRP profile will be emailed to all of our members on Monday morning.