Dorchester Minerals, L.P. (DMLP) | Investment Case

1. Company Snapshot

1.a. Company Description

Dorchester Minerals, L.P. engages in the acquisition, ownership, and administration of producing and nonproducing natural gas and crude oil royalty, net profit, and leasehold interests in the United States.Its royalty properties consist of producing and nonproducing mineral, royalty, and overriding royalty interests located in 582 counties and parishes in 26 states; and net profits interests represent net profits overriding royalty interests in various properties owned by the operating partnership.Dorchester Minerals Management LP serves as the general partner of Dorchester Minerals, L.P. The company was founded in 1982 and is based in Dallas, Texas.

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1.b. Last Insights on DMLP

Dorchester Minerals, L.P.'s recent performance was negatively driven by a 26% decline in quarterly distribution from Q3 2024 to Q4 2024, mainly due to lower sales volumes. The Q4 2024 distribution of $0.74 per unit was below expectations, and the company's sales volumes may not sustain the large increase seen in Q3 2024, where oil sales volumes rose 52% compared to Q2 2024. With the current oil and gas prices, the company's quarterly distribution may average around $0.80 per unit, but this is slightly lower than the outlier Q3 2024 distribution.

1.c. Company Highlights

Last Price	22.99
Change Percentage	2.00%
Open	22.48
Previous Close	22.54
Market Cap ( Millions)	1090
Volume	458199
Year High	34.88
Year Low	20.85
M A 50	23.97
M A 200	26.77

FCF Yield	12.76%
Dividend Yield	12.07%
ROE	21.98%
Debt / Equity	0.28%
Net Debt / EBIDTA	-32.08%
Price To Book	3.4
Price Earnings Ratio	13.88
Price To FCF	7.84
Price To sales	6.46
EV / EBITDA	9.5

2. Transcript Summary

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3. NewsRoom

Dorchester Minerals (NASDAQ:DMLP) Sets New 12-Month Low – Here’s Why

Nov -30

Source: defenseworld.net

Dorchester Minerals (NASDAQ:DMLP) Reaches New 1-Year Low – Should You Sell?

Nov -23

Source: defenseworld.net

Dorchester Minerals: Double-Digit Dividend Yield, Zero Debt, And Big Upside Potential

Nov -13

Source: seekingalpha.com

Dorchester Minerals, L.P. Announces the Passing of C.W.

Nov -04

Source: globenewswire.com

Dorchester Minerals: A Strong Rebound In Oil Sales Volumes Is Likely

Oct -27

Source: seekingalpha.com

Dorchester Minerals, L.P. Announces Its Third Quarter Distribution

Oct -23

Source: globenewswire.com

Dorchester Minerals: Very High-Yield Oil Royalty With Zero Debt

Oct -11

Source: seekingalpha.com

Dorchester Minerals: Market Variables Are Still Soft, But Growth Prospects Are Solid

Sep -12

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Royalties

Expected Growth: 4.5%

Increasing global energy demand, advancements in extraction technologies, and rising oil and gas prices drive growth in royalties from Dorchester Minerals, L.P. The partnership's diverse portfolio of properties and strategic partnerships also contribute to its growth.

Profits Interests

Expected Growth: 4.5%

Increasing demand for oil and gas, coupled with rising energy prices, drives growth in profits interests from Dorchester Minerals, L.P. Additionally, the partnership's diversified portfolio of oil and gas assets and strategic acquisitions contribute to its growth prospects.

Lease Bonus

Expected Growth: 4.5%

Increasing demand for oil and gas, coupled with rising energy prices, drives growth in the mineral leasing market. Dorchester Minerals' Lease Bonus offers landowners upfront capital, incentivizing them to lease their mineral rights, thereby fueling market expansion.

Other

Expected Growth: 4.5%

Dorchester Minerals, L.P.'s non-operating income, primarily consisting of interest income and other miscellaneous income, is expected to grow driven by increasing interest rates, diversification of investments, and a stable economic environment.

7. Detailed Products

Royalty Interests

Dorchester Minerals, L.P. acquires and manages royalty interests in oil and natural gas properties, providing a steady stream of revenue without the burden of operational costs.

Net Profits Interests

The company acquires and manages net profits interests in oil and natural gas properties, providing a share of the profits from production.

Working Interests

Dorchester Minerals, L.P. participates in the exploration, development, and production of oil and natural gas properties, providing a potential for higher returns.

Mineral Interests

The company acquires and manages mineral interests in oil and natural gas properties, providing a potential for long-term appreciation in value.

Non-Operated Working Interests

Dorchester Minerals, L.P. participates in the development and production of oil and natural gas properties, without operational responsibilities.

8. Dorchester Minerals, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Dorchester Minerals, L.P. is medium due to the availability of alternative investment options in the energy sector.

Bargaining Power Of Customers

The bargaining power of customers for Dorchester Minerals, L.P. is low due to the company's diversified customer base and lack of dependence on a single customer.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Dorchester Minerals, L.P. is medium due to the company's reliance on a few key suppliers for drilling and extraction services.

Threat Of New Entrants

The threat of new entrants for Dorchester Minerals, L.P. is high due to the relatively low barriers to entry in the oil and gas industry.

Intensity Of Rivalry

The intensity of rivalry for Dorchester Minerals, L.P. is high due to the highly competitive nature of the oil and gas industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.70%
Debt Cost	3.95%
Equity Weight	99.30%
Equity Cost	9.33%
WACC	9.30%
Leverage	0.71%

11. Quality Control: Dorchester Minerals, L.P. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Dorchester Minerals

A-Score: 6.8/10

Value: 4.4

Growth: 5.8

Quality: 9.2

Yield: 10.0

Momentum: 1.5

Volatility: 9.7

1-Year Total Return ->

MorningStar Partners

A-Score: 6.4/10

Value: 6.4

Growth: 6.6

Quality: 4.8

Yield: 10.0

Momentum: 5.5

Volatility: 5.3

1-Year Total Return ->

SandRidge Energy

A-Score: 6.3/10

Value: 7.4

Growth: 3.3

Quality: 7.9

Yield: 9.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

VAALCO Energy

A-Score: 5.7/10

Value: 8.1

Growth: 6.7

Quality: 5.9

Yield: 8.0

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

PrimeEnergy Resources

A-Score: 5.4/10

Value: 6.3

Growth: 8.9

Quality: 7.2

Yield: 0.0

Momentum: 7.0

Volatility: 2.7

1-Year Total Return ->

Berry

A-Score: 4.9/10

Value: 7.3

Growth: 4.6

Quality: 4.2

Yield: 9.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-4.44%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.30%

Dorchester Minerals, L.P. - US25820R1059

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DMLP

1.c. Company Highlights

Better Quality

Expensive

Higher Yield

Less Volatile

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Royalties

Expected Growth: 4.5%

Profits Interests

Expected Growth: 4.5%

Lease Bonus

Expected Growth: 4.5%

Other

Expected Growth: 4.5%

7. Detailed Products

Royalty Interests

Net Profits Interests

Working Interests

Mineral Interests

Non-Operated Working Interests

8. Dorchester Minerals, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Dorchester Minerals, L.P. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.99$

Current Price

22.99$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA