Falcon Minerals (NASDAQ:FLMN) and Dorchester Minerals (NASDAQ:DMLP) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Insider and Institutional Ownership
38.7% of Falcon Minerals shares are owned by institutional investors. Comparatively, 16.7% of Dorchester Minerals shares are owned by institutional investors. 15.8% of Falcon Minerals shares are owned by insiders. Comparatively, 9.4% of Dorchester Minerals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Falcon Minerals has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Dorchester Minerals has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Falcon Minerals and Dorchester Minerals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Falcon Minerals presently has a consensus target price of $9.87, indicating a potential upside of 56.70%. Given Falcon Minerals’ higher possible upside, research analysts clearly believe Falcon Minerals is more favorable than Dorchester Minerals.
This table compares Falcon Minerals and Dorchester Minerals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Falcon Minerals pays an annual dividend of $0.70 per share and has a dividend yield of 11.1%. Dorchester Minerals pays an annual dividend of $2.06 per share and has a dividend yield of 11.8%. Falcon Minerals pays out 350.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dorchester Minerals has raised its dividend for 2 consecutive years. Dorchester Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Falcon Minerals and Dorchester Minerals’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Falcon Minerals||$97.20 million||5.57||$90.13 million||$0.20||31.50|
|Dorchester Minerals||$73.28 million||8.29||$51.94 million||N/A||N/A|
Falcon Minerals has higher revenue and earnings than Dorchester Minerals.
Dorchester Minerals beats Falcon Minerals on 8 of the 15 factors compared between the two stocks.
Falcon Minerals Company Profile
Falcon Minerals Corporation acquires and owns mineral, royalty, and over-riding royalty interests in oil and natural gas properties in North America. It owns interests covering approximately 256,000 gross unit acres in the Eagle Ford Shale and Austin Chalk in Karnes, DeWitt, and Gonzales Counties in Texas, as well as approximately 68,000 gross unit acres in Pennsylvania, Ohio, and West Virginia that is prospective for the Marcellus Shale. The company is based in Philadelphia, Pennsylvania.
Dorchester Minerals Company Profile
Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of producing and nonproducing natural gas and crude oil royalty, net profits, and leasehold interests in the United States. The company's royalty properties consist of producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests located in 574 counties and parishes in 25 states; and net profits interests represent net profits overriding royalty interests in various properties owned by the operating partnership. Dorchester Minerals Management LP serves as the general partner of Dorchester Minerals, L.P. The company was founded in 1982 and is based in Dallas, Texas.
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