VNOM - Viper Energy Partners: A 5% Yield Now But Higher Payments Should Follow

• Thankfully 2021 has started off far more positively for Viper Energy Partners with their operating conditions recovering along with their distributions.
• Their last distribution increase has now left their yield at a moderate 5%, and whilst already desirable, there are three reasons that higher payments should follow in the future.
• The first being their strong distribution coverage that has excess free cash flow with the second of which being their solid existing asset base that does not require further investments.
• The third and final reason relates to their strong financial position with both low leverage and strong liquidity.
• Once management reach their goal of repaying all of their credit facility later during 2021, it seems likely they will increase their distributions higher and thus I now believe that a bullish rating is appropriate.

For further details see: