Wall Street Expects Kimbell Royalty Stock to Hit Record Highs
August 12, 2025
12.6%-Yielding Kimbell Royalty Has Never Missed a Payout
Today, I’m putting the spotlight on Kimbell Royalty stock.
The energy sector’s performance in 2025 has been a bit of a mixed bag. It entered the year on a strong note but took a hit in April on concerns about what a global trade war could do to the economy.
For now, though, it seems like fears of a recession have been moved to the back burner. The U.S. economy is chugging along. Consumer spending is solid, so too are job gains. Since April, the broader market has rallied, with the S&P 500 and Nasdaq at record levels.
Moreover, a pullback in geopolitical tensions in the Middle East has seen some energy stocks rally higher. And frankly, tensions in the Middle East should energize the U.S. to focus its attention more on stable, safe domestic oil and gas exploration and production (E&P) companies like Kimbell Royalty Partners LP (NYSE:KRP).
Kimbell Royalty Partners and its subsidiaries are engaged in acquiring and owning mineral and royalty interest in oil and natural gas properties in the U.S. (Source: “Summer 2025 Investor Presentation,” Kimbell Royalty Partners LP, August 5, 2025.)
The partnership has interests in over 131,000 gross wells across 17 million gross acres in the U.S., including the highest growth shale basins and stable conventional fields.
Roughly 98% of all onshore rigs in the Lower 48 are in counties where Kimbell holds mineral interest positions.
As a limited partnership, it doesn’t sink any money into new wells; instead, it has zero capital requirements. This supports Kimbell Royalty’s resilient free cash flow. It lets its customers do all the heavy lifting.
Kimbell Royalty receives an upfront cash bonus payment and customarily a 20% to 25% royalty on production revenues. In return, it delivers the right to explore and develop with the operator bearing 100% of costs for a specified lease term.
The partnership’s top operators include Exxon Mobil Corp, Occidental Petroleum Corp, and Pioneer Natural Resources.
And, thanks to its high-quality, diversified asset base, with current technology, Kimbell has more than 14 years of drilling inventory across its major properties.
It’s always growing, too. Since its 2017 initial public offering (IPO), Kimbell has completed over $2.0 billion in merger and acquisition transactions, grown run-rate average daily production by over 8x, and returned 68% of its $18.00/unit IPO price via quarterly cash distributions.
Record Q1 Results
Kimbell has a history of reporting record financial results, including record fourth-quarter and 2024 results. That momentum carried into 2025 with record first-quarter results. This included record first-quarter oil, natural gas, and natural gas liquids revenue of $90.0 million.
The partnership’s first-quarter net income came in at approximately $25.9 million with net income attributable to common units of approximately $17.9 million. It also reported record consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $75.5 million.
Commenting on the results, Robert Ravnaas, Kimbell’s chairman and chief executive officer, said, “We are beginning 2025 with several new milestones for Kimbell, which include records for oil, natural gas and NGL revenues, consolidated adjusted EBITDA and cash available for distribution for Q1 2025.
“Even with the uncertainty occurring across the broader geopolitical landscape, activity on our acreage remains robust with 90 rigs actively drilling on our acreage as of March 31, 2025, representing 16% market share of all land rigs drilling in the lower 48.”
Kimbell Royalty Stock: Quarterly Dividend of $0.47/Share
Kimbell Royalty Partners’ quarterly payouts fluctuate based on supply/demand, pricing, and earnings. With that said, it has not missed a quarterly distribution since it went public in 2017. (Source: “Distribution History,” Kimbell Royalty Partners LP, last accessed July 31, 2025.)
For example, the partnership paid out $0.41 per unit and $0.40 per unit in the third and fourth quarters of 2024, respectively. For the first quarter of 2025, Kimbell announced a 17.5% increase from the fourth quarter at $0.47 per unit, or $1.88 per unit, for a forward annual distribution yield of 12.62%.
For unitholders, management said that 70% of the distribution is expected to be considered returns of capital and not subject to dividend tax, further enhancing the after-tax return to Kimbell Royalty stock’s common unitholders.
Despite the inherent volatility in its payout, royalty companies like Kimbell provide cash yields that are far superior to those of the precious metals and real estate investment trust (REIT) sectors and the S&P 500. The most recent data are from April 2025.
| Sectors | Yield Comparison |
| Kimbell Royalty | 12.6% |
| Royalty Co’s | 10.3% |
| Mid-Cap D&P | 4.3% |
| Large-Cap E&P | 3.5% |
| Integrateds | 5.5% |
| MSCI REIT Index | 4.1% |
| Precious Metal Producers | 1.3% |
| S&P 500 | 1.4% |
KRP Units Could Have 61% Upside
Typically, a high dividend yield is tied to a stock/unit price that is down. That isn’t the case with Kimbell Royalty though. Kimbell Royalty stock’s big 12.6% yield isn’t a fluke. Its trailing average dividend yield is 11.41%, with a five-year average dividend yield of 10.54%.
Moreover, Kimbell Royalty stock is trading near record levels at $14.86 per unit. KRP units are having a pretty solid year, trading up approximately 29% over the last three months and a more modest 1.65% on an annual basis.
Wall Street expects Kimbell Royalty stock to make much bigger gains over the coming quarters, with analysts providing a 12-month share price target range of $17.40 to $24.00. This points to potential upside of 17% to 62%.
Even hitting the lower price target would put Kimbell Royalty stock well above its November 2024 record high of $15.67 per unit.
Chart courtesy of StockCharts.com
The Lowdown on Kimbell Royalty Stock
Kimbell Royalty Partners LP continues to be a great E&P company with a diversified, high-margin, shallow-decline portfolio of assets that have zero capital requirements. This helps provide the partnership with reliable cash flow, which it uses to provide a reliable, high-yield distribution.
In fact, Kimbell Royalty stock has returned approximately 68% of its $18.00/unit IPO price through cash distributions since 2017.
On the unit front, Kimbell Royalty stock has made big moves since April, with Wall Street expecting KRP units to hit record highs over the coming quarters.
