Head-To-Head Contrast: Energy Transfer (NYSE:ET) and Viper Energy (NASDAQ:VNOM)

Viper Energy (NASDAQ:VNOM) and Energy Transfer (NYSE:ET) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Viper Energy and Energy Transfer, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Viper Energy	0	1	16	1	3.00
Energy Transfer	0	3	12	2	2.94

Viper Energy presently has a consensus price target of $56.93, suggesting a potential upside of 33.55%. Energy Transfer has a consensus price target of $24.36, suggesting a potential upside of 18.12%. Given Viper Energy’s stronger consensus rating and higher probable upside, equities analysts clearly believe Viper Energy is more favorable than Energy Transfer.

Dividends

Viper Energy pays an annual dividend of $1.52 per share and has a dividend yield of 3.6%. Energy Transfer pays an annual dividend of $1.36 per share and has a dividend yield of 6.6%. Viper Energy pays out 1,169.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Energy Transfer pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Energy Transfer has increased its dividend for 4 consecutive years. Energy Transfer is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

87.7% of Viper Energy shares are held by institutional investors. Comparatively, 38.2% of Energy Transfer shares are held by institutional investors. 0.2% of Viper Energy shares are held by insiders. Comparatively, 3.3% of Energy Transfer shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Viper Energy has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Energy Transfer has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares Viper Energy and Energy Transfer’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Viper Energy	2.89%	3.43%	2.85%
Energy Transfer	4.87%	11.55%	3.69%

Valuation & Earnings

This table compares Viper Energy and Energy Transfer”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Viper Energy	$1.40 billion	10.98	-$68.00 million	$0.13	327.92
Energy Transfer	$85.54 billion	0.83	$4.18 billion	$1.47	14.03

Energy Transfer has higher revenue and earnings than Viper Energy. Energy Transfer is trading at a lower price-to-earnings ratio than Viper Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Energy Transfer beats Viper Energy on 12 of the 18 factors compared between the two stocks.

About Viper Energy

Viper Energy, Inc. engages in the acquisition of oil and natural gas properties. It owns, acquires, and exploits oil and natural gas properties in North America. The company was founded on February 27, 2014 and is headquartered in Midland, TX.

About Energy Transfer

Energy Transfer LP provides energy-related services. The company owns and operates natural gas transportation pipeline, and natural gas storage facilities in Texas and Oklahoma; and approximately 20,090 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. In addition, the company owns and operates natural gas gathering pipelines, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, Montana, North Dakota, Wyoming, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and transports and supplies water to natural gas producer in Pennsylvania. Further, it owns 5,700 miles of natural gas liquid (NGL) pipeline; NGL fractionation facilities; NGL storage facilities; and other NGL storage assets and terminal. Additionally, the company provides crude oil transportation, terminalling, acquisition, and marketing activities; owns and operates approximately 14,500 miles of crude oil trunk and gathering pipelines in the Southwest, Midcontinent, and Midwest United States; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum products. It also offers natural gas compression services; carbon dioxide and hydrogen sulfide removal services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 1996 and is headquartered in Dallas, Texas.