BSM

We rate Black Stone Minerals, L.P. (BSM) as a Hold with a composite score of 55.2/100 at a current price of $15.23. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (92th percentile) and quality (69th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (30th percentile) and investment (41th percentile) tempers our overall conviction. We assign a Narrow Moat rating (69/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Black Stone Minerals, L.P. holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 55.2/100 places it at rank #1247 in our full 7,333-stock universe. At $2.8B in market capitalization, Black Stone Minerals, L.P. is a mid-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 21%, though momentum at the 30th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 100% (+56.8pp vs sector) narrow to operating margins of 61% (+49.2pp vs sector) and net margins of 60.0%, yielding a gross-to-net conversion rate of 60%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $15.23, Black Stone Minerals, L.P. is trading near fair value based on current fundamentals. Our value factor score of 62/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 10.0x (a 27% discount to the sector median of 13.7x), EV/EBITDA of 9.8x (at a premium), P/B of 3.9x, P/S of 6.6x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to Black Stone Minerals, L.P.. The company exhibits strong financial stability with a beta of 0.58, conservative leverage (18% D/E), and a stability factor in the 92th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.58 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 92th percentile and quality factor at the 69th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 100% provide a buffer against cost pressures; conservative leverage (18% D/E) limits balance sheet risk; above-average stability (92th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Black Stone Minerals, L.P.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 38.9%, disciplined leverage (18% D/E), a 10.84% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Black Stone Minerals, L.P. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 10.84% dividend yield, and the combination of 25.2% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Black Stone Minerals, L.P. receives a Hold rating with a composite score of 55.2/100 (rank #1247 of 7,333). Our quantitative framework assigns a Narrow Moat (69/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 59/100.

Our analysis supports a neutral stance on Black Stone Minerals, L.P.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.