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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
16.4%
Sector: 6.7%
Dividend Analysis audit
HIGH YIELD
12.31%
Trailing Yield
$12.31
Per $100 Invested
Attractive yield supported by strong profitability.
Est. Payout Ratio
174%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Kimbell Royalty Partners, LP (KRP) receives a "Buy" rating with a composite score of 52.1/100, ranked #84 out of 4446 stocks. Key factor scores: Quality 50/100, Value 71/100, Momentum 49/100. This is quantitative analysis only — not investment advice.
Kimbell Royalty Partners, LP (KRP) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Kimbell Royalty Partners, LP Do?
Kimbell Royalty Partners, LP, together with its subsidiaries, acquires and owns mineral and royalty interests in oil and natural gas properties in the United States. As of December 31, 2021, it owned mineral and royalty interests in approximately 11.4 million gross acres and overriding royalty interests in approximately 4.7 million gross acres. The company's mineral and royalty interests are located in 28 states and include ownership in approximately 122,000 gross wells, including approximately 46,000 wells in the Permian Basin. It serves as the general partner of the company. The company was founded in 2013 and is based in Fort Worth, Texas. Kimbell Royalty Partners, LP (KRP) is classified as a small-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Robert D. Ravnaas and employs approximately 30 people. With a market capitalization of $1.3B, KRP is one of the notable companies in the Energy sector.
As of April 2026, Kimbell Royalty Partners, LP receives a Buy rating with a composite score of 52.1/100 and 4 out of 5 stars from the Blank Capital Research quantitative model.KRP ranks #84 out of 4,446 stocks in our coverage universe. Within the Energy sector, Kimbell Royalty Partners, LP ranks #14 of 128 stocks, placing it in the top quartile of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
KRP Stock Price and 52-Week Range
Kimbell Royalty Partners, LP (KRP) currently trades at $14.50. The stock gained $0.12 (0.8%) in the most recent trading session. The 52-week high for KRP is $15.12, which means the stock is currently trading -4.1% from its annual peak. The 52-week low is $10.98, putting the stock 32.1% above its annual trough. Recent trading volume was 396K shares, suggesting relatively thin trading activity.
Is KRP Overvalued or Undervalued? — Valuation Analysis
Kimbell Royalty Partners, LP (KRP) carries a value factor score of 71/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 14.10x, compared to the Energy sector average of 19.63x — a discount of 28%. The price-to-book ratio stands at 2.31x, versus the sector average of 1.64x. The price-to-sales ratio is 4.23x, compared to 0.47x for the average Energy stock. On an enterprise value basis, KRP trades at 10.56x EV/EBITDA, versus 3.50x for the sector.
Based on these multiples, Kimbell Royalty Partners, LP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Kimbell Royalty Partners, LP (KRP) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 16.4%, compared to the Energy sector average of 6.7%, which is within a healthy range. Return on assets (ROA) comes in at 8.2% versus the sector average of 3.7%.
On a margin basis, Kimbell Royalty Partners, LP reports gross margins of 100.0%, compared to 52.7% for the sector. The operating margin is 40.0% (sector: 10.7%). Net profit margin stands at 30.0%, versus 6.4% for the average Energy stock. Revenue growth is running at 5.3% on a trailing basis, compared to -1.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
KRP Debt, Balance Sheet, and Financial Health
Kimbell Royalty Partners, LP has a debt-to-equity ratio of 74.0%, compared to the Energy sector average of 55.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 8.64x, indicating strong short-term liquidity. Total debt on the balance sheet is $453M. Cash and equivalents stand at $40M.
KRP has a beta of 0.65, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Kimbell Royalty Partners, LP is 78/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Kimbell Royalty Partners, LP Revenue and Earnings History — Quarterly Trend
In TTM 2026, Kimbell Royalty Partners, LP reported revenue of $335M. Net income for the quarter was $101M. Gross margin was 100.0%. Operating income came in at $134M.
In FY 2025, Kimbell Royalty Partners, LP reported revenue of $334M. Net income for the quarter was $100M. Revenue grew 7.9% year-over-year compared to FY 2024. Operating income came in at $133M.
In Q3 2025, Kimbell Royalty Partners, LP reported revenue of $81M. Net income for the quarter was $22M. Revenue grew -3.8% year-over-year compared to Q3 2024. Operating income came in at $29M.
In Q2 2025, Kimbell Royalty Partners, LP reported revenue of $87M. Net income for the quarter was $27M. Revenue grew 13.0% year-over-year compared to Q2 2024. Operating income came in at $38M.
Over the past 8 quarters, Kimbell Royalty Partners, LP has demonstrated a growth trajectory, with revenue expanding from $77M to $335M. Investors analyzing KRP stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
KRP Dividend Yield and Income Analysis
Kimbell Royalty Partners, LP (KRP) currently pays a dividend yield of 12.3%. At this yield, a $10,000 investment in KRP stock would generate approximately $$1231.00 in annual dividend income. This compares to the Energy sector average dividend yield of 1.9%, meaning KRP offers above-average income for its sector. With a net margin of 30.0%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
KRP Momentum and Technical Analysis Profile
Kimbell Royalty Partners, LP (KRP) has a momentum factor score of 49/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 33/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
KRP vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing KRP against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full KRP vs S&P 500 (SPY) comparison to assess how Kimbell Royalty Partners, LP stacks up against the broader market across all factor dimensions.
KRP Next Earnings Date
No upcoming earnings date has been announced for Kimbell Royalty Partners, LP (KRP) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy KRP? — Investment Thesis Summary
The bull case for Kimbell Royalty Partners, LP rests on several quantitative strengths. The value score of 71/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 78/100) reduces downside risk.
In summary, Kimbell Royalty Partners, LP (KRP) earns a Buy rating with a composite score of 52.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on KRP stock.
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Institutional Research Dossier
Kimbell Royalty Partners, LP (KRP) Deep Dive Analysis
Published on March 24, 2026
Action RatingBuy
Sections
Executive Summary
We maintain a Buy rating on Kimbell Royalty Partners, LP (KRP). This rating is supported by the company's attractive valuation relative to its peers, its high profitability, and its stable business model focused on mineral and royalty interests. While the company's recent free cash flow generation has been negative, its strong gross and operating margins, coupled with a lower P/E and EV/EBITDA compared to the sector, suggest that the market is undervaluing KRP's earnings potential and stability.
The primary driver of our Buy thesis is KRP's ability to generate substantial cash flow from its diverse portfolio of mineral and royalty interests, particularly in the Permian Basin. The company's high gross margins (100%) and operating margins (40%) indicate a highly efficient business model. While the debt levels are elevated, the company's strong current ratio and profitability provide a buffer. Investors should focus on the company's ability to manage its debt and capitalize on future acquisitions to further expand its royalty base.
Business Strategy & Overview
Kimbell Royalty Partners operates as an acquirer and owner of mineral and royalty interests in oil and natural gas properties across the United States. The company's revenue is derived from royalty payments received from oil and gas production on its acreage. Unlike exploration and production (E&P) companies, Kimbell does not directly operate wells or incur significant capital expenditures related to drilling and completion. This royalty-based model provides a relatively stable and predictable revenue stream, as the company benefits from production regardless of who operates the wells.
The company's strategic focus is on acquiring additional mineral and royalty interests, primarily through acquisitions of smaller, privately held royalty companies or individual mineral owners. This consolidation strategy allows Kimbell to increase its scale, diversify its asset base, and benefit from economies of scale in administrative and operational functions. The company's significant presence in the Permian Basin, with ownership in approximately 46,000 gross wells, is a key driver of its revenue and profitability.
Kimbell's business model is inherently tied to the activity of E&P companies operating on its acreage. Increased drilling activity and production volumes lead to higher royalty payments for Kimbell. The company's diversified portfolio across multiple basins and operators mitigates the risk associated with any single operator or geographic region. However, the company is still exposed to fluctuations in commodity prices, as lower oil and gas prices can lead to reduced drilling activity and production, impacting royalty revenues.
The company's growth strategy also involves actively managing its existing royalty portfolio to optimize production and identify opportunities for further development. This includes working with operators to encourage drilling and development on its acreage. Kimbell's management team has a proven track record of successfully acquiring and integrating royalty assets, which is critical to the company's long-term growth prospects.
Kimbell's competitive landscape includes other royalty companies, as well as individual mineral owners. The company differentiates itself through its scale, diversified asset base, and experienced management team. The company's ability to access capital markets is also a key competitive advantage, allowing it to pursue larger acquisitions that smaller royalty companies may not be able to undertake.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
5.3%
Sector: -1.2%
-552% VS SCTR
Economic Moat Analysis
Kimbell Royalty Partners possesses a narrow economic moat, primarily derived from its cost advantages and the diversification of its royalty base. The royalty business model inherently benefits from high gross margins, as Kimbell does not bear the direct costs of exploration, drilling, or production. The company's 100% gross margin reflects this advantage, significantly exceeding the sector average of 55.1%. This cost advantage allows Kimbell to generate higher profits compared to E&P companies, even during periods of lower commodity prices.
The diversification of Kimbell's royalty interests across approximately 122,000 gross wells in 28 states provides a degree of protection against regional downturns or operational issues affecting individual operators. This diversification reduces the company's reliance on any single operator or basin, mitigating the risk of significant revenue declines. The company's large footprint in the Permian Basin, a prolific and relatively low-cost oil and gas producing region, further strengthens its competitive position.
However, Kimbell's moat is not wide due to the relatively low barriers to entry in the royalty acquisition business. While scale provides some advantages in terms of access to capital and negotiating power, smaller royalty companies and individual mineral owners can still compete effectively. The value of mineral rights is ultimately determined by the underlying commodity prices and the productivity of the wells, which are factors largely outside of Kimbell's control.
Furthermore, the company's reliance on the activity of E&P companies exposes it to the cyclical nature of the oil and gas industry. During periods of low commodity prices, E&P companies may reduce drilling activity, leading to lower royalty payments for Kimbell. While the company's diversified portfolio helps to mitigate this risk, it does not eliminate it entirely. The company's ability to maintain its profitability and cash flow during periods of low commodity prices will be a key test of its economic moat.
The company's acquisition strategy also plays a role in its economic moat. By acquiring smaller royalty interests, Kimbell can consolidate its position and increase its scale. However, the success of this strategy depends on the company's ability to identify and acquire attractively priced assets. Overpaying for acquisitions could erode the company's cost advantage and weaken its economic moat.
Financial Health & Profitability
Kimbell Royalty Partners exhibits a mixed financial profile. The company's revenue has shown growth, increasing from $294.07 million in FY2023 to $333.83 million in FY2025. Net income has fluctuated, with a significant increase in FY2025 to $99.65 million compared to $11.07 million in FY2024. The company's gross margin is consistently 100%, reflecting its royalty-based business model. Operating margins are also strong, averaging around 40% in recent quarters, significantly higher than the sector average of 10.6%.
However, the company's free cash flow (FCF) generation has been inconsistent. While FY2024 saw a substantial FCF of $259.22 million, the most recent TTM FCF is negative at -$2.92 million. This negative FCF raises concerns about the company's ability to fund its distributions and acquisitions without relying on debt or equity financing. The quarterly financial history shows fluctuations in net income and operating margins, indicating some volatility in the company's earnings.
Kimbell's balance sheet reflects a significant amount of debt. With total debt of $452.99 million and total cash of $40.00 million, the company's debt-to-equity ratio is high at 74.00, exceeding the sector average of 55.00. This high leverage increases the company's financial risk, particularly during periods of low commodity prices. However, the company's current ratio is strong at 8.64, indicating a healthy level of liquidity and the ability to meet its short-term obligations.
The company's return on equity (ROE) is impressive at 16.4%, significantly higher than the sector average of 6.9%. This indicates that Kimbell is effectively utilizing its equity to generate profits. However, the high debt levels contribute to the elevated ROE, and a reduction in debt could lower the ROE in the future. The company's ability to maintain its profitability and generate positive FCF will be crucial for managing its debt and sustaining its distributions.
Overall, Kimbell's financial health is characterized by strong profitability and high margins, but also by high debt levels and inconsistent FCF generation. The company's ability to manage its debt, generate consistent FCF, and maintain its profitability will be key factors in its long-term financial performance.
Valuation Assessment
Kimbell Royalty Partners appears attractively valued based on several key metrics. The company's P/E ratio of 13.6x is significantly lower than the sector average of 19.5x, suggesting that the market is undervaluing Kimbell's earnings potential. Similarly, the company's EV/EBITDA ratio of 2.6x is also lower than the sector average of 3.5x, indicating that the company is undervalued relative to its earnings before interest, taxes, depreciation, and amortization.
The company's high gross and operating margins further support the argument that Kimbell is undervalued. The company's 100% gross margin and 40% operating margin demonstrate a highly efficient business model that generates substantial profits from its royalty interests. These high margins should command a premium valuation, but the market appears to be discounting the company's earnings potential.
However, the company's negative free cash flow (FCF) in the most recent TTM period raises some concerns about its valuation. While the company generated substantial FCF in FY2024, the recent negative FCF suggests that the company may be facing some challenges in generating cash flow from its operations. This could be due to increased capital expenditures, lower production volumes, or other factors. Investors should closely monitor the company's FCF generation in future quarters to assess the sustainability of its earnings and distributions.
Despite the negative FCF, the company's strong profitability and attractive valuation multiples suggest that the stock is undervalued. The market may be overly focused on the company's debt levels or the cyclical nature of the oil and gas industry. However, Kimbell's diversified royalty base, high margins, and experienced management team provide a solid foundation for long-term growth and profitability.
A discounted cash flow (DCF) analysis would be helpful in determining the intrinsic value of the company. However, without detailed projections of future cash flows, it is difficult to perform a reliable DCF analysis. Based on the available information, it appears that Kimbell is trading at a discount to its intrinsic value, and the Buy rating is warranted.
Risk & Uncertainty
Kimbell Royalty Partners faces several risks and uncertainties that could impact its financial performance and valuation. The most significant risk is the volatility of commodity prices. Lower oil and gas prices can lead to reduced drilling activity and production, which in turn reduces royalty payments for Kimbell. While the company's diversified portfolio helps to mitigate this risk, it does not eliminate it entirely. A prolonged period of low commodity prices could significantly impact the company's revenue and profitability.
Another risk is the dependence on the activity of E&P companies operating on Kimbell's acreage. If E&P companies reduce drilling activity or experience operational issues, this could negatively impact Kimbell's royalty revenues. The company's ability to maintain strong relationships with E&P companies and encourage development on its acreage is crucial to mitigating this risk.
The company's high debt levels also pose a significant risk. High leverage increases the company's financial risk, particularly during periods of low commodity prices. The company's ability to manage its debt and generate sufficient cash flow to meet its debt obligations is critical. A failure to manage its debt could lead to financial distress or even bankruptcy.
Acquisition risk is also a concern. Kimbell's growth strategy relies on acquiring additional royalty interests. However, there is no guarantee that the company will be able to identify and acquire attractively priced assets. Overpaying for acquisitions could erode the company's cost advantage and weaken its economic moat. The integration of acquired assets can also be challenging and may not always be successful.
Regulatory risk is another factor to consider. Changes in environmental regulations or other government policies could impact the oil and gas industry and affect Kimbell's royalty revenues. For example, increased restrictions on drilling or hydraulic fracturing could reduce production and lower royalty payments. The company's ability to adapt to changing regulatory environments is important for its long-term success.
Bulls Say / Bears Say
The Bull Case
BULL VIEWKimbell's royalty-based business model provides stable, high-margin revenue streams, insulating it from the direct capital expenditure risks faced by E&P companies.
BULL VIEWThe company's diversified portfolio of mineral and royalty interests across numerous basins and operators reduces its reliance on any single asset or geographic region, providing downside protection.
BULL VIEWKimbell's attractive valuation, with a lower P/E and EV/EBITDA compared to its peers, presents a compelling investment opportunity for value-oriented investors.
The Bear Case
BEAR VIEWKimbell's high debt levels expose it to significant financial risk, particularly during periods of low commodity prices, potentially jeopardizing its ability to maintain distributions.
BEAR VIEWThe company's reliance on the activity of E&P companies makes it vulnerable to fluctuations in drilling activity and production, impacting royalty revenues.
BEAR VIEWNegative free cash flow raises concerns about Kimbell's ability to fund its distributions and acquisitions without relying on debt or equity financing, potentially diluting shareholder value.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score KRP and 4,400+ other equities.
Kimbell Royalty Partners, LP exhibits a 254% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
8.2%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
100.0%
Sector: 52.7%
Operating Margin
Core business profitability
40.0%
Sector: 10.7%
Net Margin
Bottom-line profitability
30.0%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield1.89%
Yield Delta+551%
Income Projection audit
A $10,000 investment would generate approximately $1231 annually in dividends at the current trailing rate.
