Gulfport Energy vs. Viper Energy: Is an Energy Producer or Royalty Collector the Better Buy?

Choosing between an active driller and a royalty owner can be difficult as market conditions shift. Gulfport Energy (NYSE:GPOR) and Viper Energy (NASDAQ:VNOM) represent two distinct ways to play the domestic oil and gas space.

Gulfport Energy operates as a traditional exploration and production firm, while Viper Energy owns mineral interests and relies on partners for production. This comparison looks at their business models, balance sheets, and valuations to determine which might be the better fit for your long-term goals.

The case for Gulfport Energy

Gulfport Energy focuses its efforts on developing natural gas, crude oil, and natural gas liquids across the United States. Its primary operations are located in eastern Ohio and central Oklahoma, targeting high-potential reservoirs in the Appalachia and Anadarko basins. This concentrated focus allows the company to build deep expertise in these specific geographies while supplying essential fuels to the domestic market.

During FY 2025, the company reported revenue of approximately $1.3 billion, representing nearly 43% growth over the previous year. This resulted in net income of nearly $427.8 million, which translates to a net margin of roughly 32.3%. This net margin identifies the percentage of revenue remaining as profit after all expenses are paid.

As of its December 2025 balance sheet, Gulfport Energy maintained a debt-to-equity ratio of approximately 0.4x. This ratio measures total debt relative to shareholders’ equity, indicating how much a company uses borrowed money. The company reported a current ratio of roughly 0.7x, which compares short-term assets to short-term liabilities. Free cash flow, which is cash from operations minus capital expenditures, was nearly $275.6 million.

The case for Viper Energy

Viper Energy operates under a unique business model, owning mineral and royalty interests primarily in the Permian Basin. Instead of drilling wells itself, the company earns a percentage of the revenue generated by other operators who develop its acreage. This royalty-based structure typically requires less capital spending than active drilling operations.

The company depends heavily on Diamondback Energy (NASDAQ:FANG), which provides the personnel and administrative services needed for operations. This strategic relationship gives Viper Energy exposure to some of the most productive oil fields in North America. By focusing on royalties, the company aims to generate cash flow from its partners’ production activities.

For FY 2025, revenue reached nearly $1.4 billion, an increase of roughly 57% year over year. Despite the high revenue growth, the company reported a net loss of approximately $69 million. This resulted in a negative net margin of nearly 5.1%, which indicates that total expenses exceeded total revenue during that period.

As of the December 2025 balance sheet, the debt-to-equity ratio was approximately 0.5x. This figure illustrates the relationship between total debt and shareholder equity. The company reported a current ratio of roughly 3.7x, indicating its ability to cover short-term debts with liquid assets. Free cash flow for the year was around -$1.3 billion, suggesting heavy investment in acquiring new interests.

Risk profile comparison

Gulfport Energy faces significant risks from commodity price volatility, as fluctuations in natural gas and oil prices directly impact its revenue. The company is also subject to operational hazards, such as equipment failures or well control incidents, that could lead to environmental liabilities. Because its assets are concentrated in Ohio and Oklahoma, it is disproportionately vulnerable to regional infrastructure constraints or local regulatory changes.

Viper Energy is highly operator-dependent, relying on Diamondback Energy and other partners to execute drilling programs. If these operators reduce their capital spending, Viper Energy’s royalty income could decline sharply. Furthermore, its heavy concentration in the Permian Basin exposes it to regional pipeline bottlenecks and weather-related disruptions that could affect production across its entire portfolio.

Valuation comparison

Gulfport Energy currently trades at a significantly lower earnings multiple than Viper Energy, suggesting it may be the more value-oriented choice for investors.

Sector benchmark uses the SPDR XLE sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Both Gulfport and Viper are similarly sized oil and gas companies by revenue, but there are key differences.

On the surface, Venom is appealing because it doesn’t need to make capital investments in drilling and other gear that wears out over time. Simply owning mineral rights and collecting a fee for the work others do on its land seems like an ideal business model.

But as Viper’s net loss in 2025 shows, it’s not. Mineral rights are inherently depleting assets — eventually, oil and gas fields are tapped out or become unprofitable for others to pump. That means Viper has to continually invest in new mineral rights to keep its cash flow coming. The fact that Viper doesn’t pay a dividend is also a strike against it.

Gulfport Energy, meanwhile, is dependent on much of the same factors as Viper: natural gas and oil prices. As the operator of wells (it owns some acreage and leases others), it has capital expenses that Viper doesn’t, but the business has been working well. Gulfport is expected to have slightly improved revenue in 2026 over 2025, and, thanks to share buybacks, that will result in about 20% greater earnings per share of around $26 this year. It also does not pay a dividend, however.

Oil and gas is a commodity business. In most cases, the best bet is to go with the better value option, especially when it already turns a profit. That gives the nod to Gulfport Energy for 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool recommends Viper Energy. The Motley Fool has a disclosure policy.