Viper Energy, Inc. (NASDAQ: VNOM)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0002074176
Market Cap 2.89 Bn
P/B 4.71
P/E -54.29
P/S 10.73
ROIC (Qtr) 3.27
Div Yield % 2.21
Rev 1y % (Qtr) 98.10
Total Debt (Qtr) 2.62 Bn
Debt/Equity (Qtr) 0.57

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 811.91M provides exceptional 10.26x coverage of interest expenses 79.11M, showing strong debt service capability.
  • Strong operating cash flow of 811.91M provides 29.48x coverage of SG&A expenses 27.54M, showing efficient operational cost management.
  • Strong tangible asset base of 13.69B provides 5.22x coverage of total debt 2.62B, indicating robust asset backing and low credit risk.
  • Free cash flow of (1.97B) provides excellent 6.75x coverage of dividends (291.91M), indicating sustainable shareholder returns.
  • Robust tangible asset base of 13.69B provides 32.98x coverage of working capital 415M, indicating strong operational backing.

Bear case

  • Operating cash flow of 811.91M barely covers its investment activities of (2.78B), with a coverage ratio of -0.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 811.91M provides thin coverage of dividend payments of (291.91M) with a -2.78 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 811.91M provides minimal -5.78x coverage of tax expenses of (140.44M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (1.97B) provides weak coverage of capital expenditures of 2.78B, with a -0.71 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 183.74M show weak coverage of depreciation charges of 437.59M, with a 0.42 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 110.33 Bn 27.13 2.37 75.15 Bn
2 EPD Enterprise Products Partners L.P. 76.10 Bn 12.98 1.39 33.58 Bn
3 KMI Kinder Morgan, Inc. 68.80 Bn 28.77 4.49 32.58 Bn
4 TRP Tc Energy Corp 62.22 Bn 25.32 5.86 44.47 Bn
5 WMB Williams Companies, Inc. 50.26 Bn -71.19 6.88 27.99 Bn
6 TRGP Targa Resources Corp. 36.23 Bn -86.30 4.92 17.43 Bn
7 OKE Oneok Inc /New/ 35.88 Bn 31.48 3.74 33.73 Bn
8 CQP Cheniere Energy Partners, L.P. 30.34 Bn 27.99 4.44 14.76 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.26 3.64
EV to Assets EV to Assets 0.26 3.64
EV to Cash from Ops. EV/CFO 54.34 35.75
EV to Cash from Ops. EV/CFO 54.34 35.75
EV to Debt EV to Debt 1.34 -70.28
EV to Debt EV to Debt 1.34 -70.28
EV to EBIT EV/EBIT -172.47 14.85
EV to EBIT EV/EBIT -172.47 14.85
EV to EBITDA EV/EBITDA 379.10 22.44
EV to EBITDA EV/EBITDA 379.10 22.44
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.84 -3.70
Dividend Coverage Ratio Div Coverage (Qtr) 0.84 -3.70
Dividend Payout Ratio % Div Payout % (Qtr) 92.20 71.27
Dividend Payout Ratio % Div Payout % (Qtr) 92.20 71.27
Dividend per Basic Share Div per Share (Qtr) 2.36 1.48
Dividend per Basic Share Div per Share (Qtr) 2.36 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -17.83 33.30
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -17.83 33.30
Interest Coverage Int. cover (Qtr) 2.32 5.27
Interest Coverage Int. cover (Qtr) 2.32 5.27
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -204.19 -7.43
Capex Growth (1y) % Capex 1y % (Qtr) -204.19 -7.43
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 162.68 16,427.94
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 162.68 16,427.94
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.84
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.84
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 64.09 -1.47
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 64.09 -1.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -8.66 -3.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -8.66 -3.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.09 0.77
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.09 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.21
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.21
Cash Ratio Cash Ratio (Qtr) 0.94 0.80
Cash Ratio Cash Ratio (Qtr) 0.94 0.80
Current Ratio Curr Ratio (Qtr) 1.88 1.65
Current Ratio Curr Ratio (Qtr) 1.88 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 0.57 1.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.57 1.12
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 52.30 35.59
EBITDA Margin % EBITDA Margin % (Qtr) 52.30 35.59
EBIT Margin % EBIT Margin % (Qtr) 15.46 27.76
EBIT Margin % EBIT Margin % (Qtr) 15.46 27.76
EBT Margin % EBT Margin % (Qtr) 8.80 17.49
EBT Margin % EBT Margin % (Qtr) 8.80 17.49
Gross Margin % Gross Margin % (Qtr) 93.20 48.68
Gross Margin % Gross Margin % (Qtr) 93.20 48.68
Net Profit Margin % Net Margin % (Qtr) 20.60 15.46
Net Profit Margin % Net Margin % (Qtr) 20.60 15.46