Critical Contrast: Coterra Energy (NYSE:CTRA) and Viper Energy (NASDAQ:VNOM)

Viper Energy (NASDAQ:VNOM) and Coterra Energy (NYSE:CTRA) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Dividends

Viper Energy pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Coterra Energy pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Viper Energy pays out 51.5% of its earnings in the form of a dividend. Coterra Energy pays out 50.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Coterra Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Viper Energy and Coterra Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Viper Energy	$827.70 million	11.65	$200.09 million	$2.33	21.97
Coterra Energy	$5.66 billion	3.30	$1.63 billion	$1.66	15.26

Coterra Energy has higher revenue and earnings than Viper Energy. Coterra Energy is trading at a lower price-to-earnings ratio than Viper Energy, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Viper Energy has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, Coterra Energy has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Viper Energy and Coterra Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Viper Energy	0	0	11	0	3.00
Coterra Energy	0	2	16	1	2.95

Viper Energy currently has a consensus price target of $58.27, suggesting a potential upside of 13.84%. Coterra Energy has a consensus price target of $32.47, suggesting a potential upside of 28.19%. Given Coterra Energy’s higher probable upside, analysts plainly believe Coterra Energy is more favorable than Viper Energy.

Profitability

This table compares Viper Energy and Coterra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Viper Energy	24.65%	6.72%	4.98%
Coterra Energy	21.91%	9.38%	5.95%

Insider and Institutional Ownership

87.7% of Viper Energy shares are owned by institutional investors. Comparatively, 87.9% of Coterra Energy shares are owned by institutional investors. 0.3% of Viper Energy shares are owned by insiders. Comparatively, 1.7% of Coterra Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Coterra Energy beats Viper Energy on 11 of the 17 factors compared between the two stocks.

About Viper Energy

Viper Energy, Inc. owns and acquires mineral and royalty interests in oil and natural gas properties in the Permian Basin, North America. Viper Energy Partners GP LLC operates as the general partner of the company. The company was formerly known as Viper Energy Partners LP and changed its name to Viper Energy, Inc. in November 2023. The company was founded in 2013 and is based in Midland, Texas. Viper Energy, Inc. is a subsidiary of Diamondback Energy, Inc.

About Coterra Energy

Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company’s properties include the Marcellus Shale with approximately 186,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania; Permian Basin properties with approximately 296,000 net acres located in west Texas and southeast New Mexico; and Anadarko Basin properties with approximately 182,000 net acres located in Oklahoma. It also operates natural gas and saltwater gathering and disposal systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities. Coterra Energy Inc. was incorporated in 1989 and is headquartered in Houston, Texas.