DMLP

We rate DORCHESTER MINERALS, L.P. (DMLP) as a Reduce with a composite score of 42.3/100 at a current price of $25.50. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (84th percentile) and value (47th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (16th percentile) and investment (35th percentile) tempers our overall conviction. We assign a Narrow Moat rating (43/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. 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.

DORCHESTER 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 42.3/100 places it at rank #3231 in our full 7,333-stock universe. At $1.2B in market capitalization, DORCHESTER MINERALS, L.P. is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -5% combined with momentum at the 16th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 0% (-43.2pp vs sector) narrow to operating margins of 45% (+32.4pp vs sector) and net margins of 44.7%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $25.50, DORCHESTER MINERALS, L.P. is trading near fair value based on current fundamentals. Our value factor score of 47/100 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 15.8x (roughly in line with the sector median of 13.7x), EV/EBITDA of 15.8x (at a premium), P/B of 3.8x, P/S of 7.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to DORCHESTER MINERALS, L.P.. The company exhibits strong financial stability with a beta of 0.45, conservative leverage (2% D/E), and a stability factor in the 84th 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 0.45 — 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 84th percentile and quality factor at the 38th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (2% D/E) limits balance sheet risk; above-average stability (84th percentile) suggests predictable business dynamics; a 12.24% dividend yield anchors total return. 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 DORCHESTER 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 24.0%, disciplined leverage (2% D/E), a 12.24% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — DORCHESTER 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 12.24% dividend yield, and the combination of 23.5% 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, DORCHESTER MINERALS, L.P. receives a Reduce rating with a composite score of 42.3/100 (rank #3231 of 7,333). Our quantitative framework assigns a Narrow Moat (43/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 44/100.

Our analysis does not support a constructive view on DORCHESTER MINERALS, L.P. at this time. The combination of the current quantitative profile, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.