Dear Sheryl,

Over the weekend, one of our stocks was downgraded to a D-rating on the Elite Dividend Payers Buy List. However, instead of selling it outright, I've decided to keep it in Growth Investor. This is due to the company's strong fundamentals and potential as a growth stock.

So today, I'm moving Viper Energy Partners LP (VNOM) from the Elite Dividend Payers Buy List to the High-Growth Investments Buy List.

Allow me to explain why I'm moving VNOM rather than selling it. If you look up VNOM in Dividend Grader, you'll see that the stock earns a D-rating due to degrading Dividend Reliability and Dividend Trend. That's because VNOM recently cut its quarterly dividend from $0.60 to $0.58, which isn't unheard of for energy companies. As a reminder, we use Dividend Grader ratings for the basis of our Elite Dividend Payers Buy List.

However, VNOM still earns solid marks for its growth fundamentals, and institutional buying pressure is quite strong. If you look up VNOM in Portfolio Grader, you'll see that it earns a straight-A for its Quantitative Grade. This means that buying pressure is still going strong, which is a very good sign for the stock going forward.

On the fundamentals side, VNOM needs to improve its earnings surprise history and cash flow. Otherwise, it is a fundamentally solid company. Last quarter, VNOM announced that it achieved production of 18,384 barrels of oil equivalent per day. That represented a 46% year-over-year increase.

Viper Energy Partners reported earnings of $2.3 million, or $0.05 per share, on $78.6 million in revenue. Adjusted earnings per share were $0.43. The consensus estimate called for adjusted earnings of $0.47 per share on $78.48 million in sales. So VNOM posted an 8.5% earnings miss and a slight sales surprise.

Meanwhile, the company upped its full-year 2018 production guidance; it now expects to produce between 16,750 and 17,250 barrels of oil equivalent in 2018. That translates to 54% annualized production over 2017.

As a result, analysts have been steadily revising their earnings estimates higher since its third-quarter earnings report. This quarter, Viper Energy Partners is expected to see 35.1% annual earnings growth and 47.4% annual sales growth. So, I expect that Viper Energy's growth fundamentals will improve this quarter.

The other reason I want to continue holding VNOM is that it has a whopping 6.9% annual dividend yield. While VNOM shaved off a little from this quarter's dividend, it still has a 71% 12-month dividend growth rate. Speaking of which, if you held VNOM shares at the market close on November 7, you have a dividend coming your way. Shareholders of record will receive $0.58 per share on November 19.

For these reasons, I recommend VNOM in my Breakthrough Stocks and Platinum Growth Club services. I'm not ready to sell it from Growth Investor yet, so I'll be moving it to the High-Growth Investments Buy List.

You don't need to do a thing with your VNOM shares; just be advised that I'll be covering as part of the High-Growth Investments Buy List going forward.

So, please continue holding your VNOM shares, and I'll be in touch later this week with more updates.

Sincerely,

Louis Navellier