Kimbell Royalty Partners (KRP) for HIGH Dividends + Growth

[dan_s]

KRP is a partnership that has elected to be taxed as a C-Corp. It is one of four minerals companies in our High Yield Income Portfolio. Based on my forecast model, KRP's 2025 distributions will be AT LEAST $1.50/unit for annualized yield of more than 11%. It has the highest after-tax yield of the four minerals companies in the portfolio and I like its production mix.

The Board of Directors of the General Partner (the "Board of Directors") approved a cash distribution payment to common unitholders of 75% of cash available for distribution for the first quarter of 2025, or $0.47 per common unit. The distribution will be payable on May 28, 2025 to common unitholders of record at the close of business on May 20, 2025.

Kimbell plans to utilize the remaining 25% of cash available for distribution for the first quarter of 2025 to pay down approximately $16.9 million of the outstanding borrowings under its secured revolving credit facility.

Kimbell expects that approximately 70% of its first quarter 2025 distribution should not constitute dividends for U.S. federal income tax purposes, but instead are estimated to constitute non-taxable reductions to the basis of each distribution recipient's ownership interest in Kimbell common units. The reduced tax basis will increase unitholders' capital gain (or decrease unitholders' capital loss) when unitholders sell their common units.