VNOM - Kimbell Royalty Partners: A Nice High Yield But More Exciting Options Exist

• Kimbell Royalty Partners offers investors an often overlooked way to capitalize on higher oil prices whilst generating income, but their peers offer more exciting options.
• Their financial performance broadly tracks the price of oil with their variable distribution policy seeing a 75/25 split between distributions and deleveraging.
• Unlike their peers whose distribution potential is set to fundamentally grow in any oil price environment, their future distribution growth will require even higher oil prices.
• Thankfully, at least their financial position is healthy with low leverage and strong liquidity.
• Since their unit price is already back towards its pre-Covid-19 level and their peers offer more exciting options, I only believe that a neutral rating is appropriate.

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