Critical Analysis: Frontline (NYSE:FRO) and Natural Resource Partners (NYSE:NRP)

Frontline (NYSE:FRO) and Natural Resource Partners (NYSE:NRP) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Profitability

This table compares Frontline and Natural Resource Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontline	49.47%	44.24%	20.89%
Natural Resource Partners	57.13%	16.65%	13.88%

Dividends

Frontline pays an annual dividend of $10.44 per share and has a dividend yield of 18.4%. Natural Resource Partners pays an annual dividend of $3.00 per share and has a dividend yield of 2.6%. Frontline pays out 156.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Natural Resource Partners pays out 38.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Frontline and Natural Resource Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontline	2	5	4	0	2.18
Natural Resource Partners	0	0	1	0	3.00

Frontline currently has a consensus price target of $48.12, indicating a potential downside of 15.03%. Given Frontline’s higher possible upside, analysts clearly believe Frontline is more favorable than Natural Resource Partners.

Risk and Volatility

Frontline has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Natural Resource Partners has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Insider & Institutional Ownership

22.7% of Frontline shares are owned by institutional investors. Comparatively, 31.8% of Natural Resource Partners shares are owned by institutional investors. 48.1% of Frontline shares are owned by insiders. Comparatively, 35.3% of Natural Resource Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Frontline and Natural Resource Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontline	$2.71 billion	4.64	$379.08 million	$6.67	8.49
Natural Resource Partners	$199.97 million	7.72	$136.37 million	$7.84	14.86

Frontline has higher revenue and earnings than Natural Resource Partners. Frontline is trading at a lower price-to-earnings ratio than Natural Resource Partners, indicating that it is currently the more affordable of the two stocks.

About Frontline

Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.

About Natural Resource Partners

Natural Resource Partners L.P., together with its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States. It operates in two segments, Mineral Rights and Soda Ash. The company owns interests in coal, soda ash, trona, and other natural resources. Its coal reserves are primarily located in the Appalachia Basin, the Illinois Basin, and the Northern Powder River Basin in the United States; industrial minerals and aggregates properties located in the United States; and oil and gas properties located in Louisiana. The company leases a portion of its reserves in exchange for royalty payments; and owns and leases transportation and processing infrastructure related to coal properties. NRP (GP) LP serves as the general partner of the company. Natural Resource Partners L.P. was incorporated in 2002 and is headquartered in Houston, Texas.