Is Dorchester Minerals (DMLP) stock Halal?

Dorchester Minerals is a unique publicly traded partnership focusing on the ownership and management of mineral properties across the United States. Its primary purpose is to generate income through the acquisition and management of interests in producing, and non-producing oil and natural gas properties. Dorchester Minerals primarily impacts the energy sector, specifically oil and natural gas production, which are vital components of global energy supply and consumption. Before any of that matters to a Muslim investor, one question comes first: is Dorchester Minerals stock Halal?

Is Dorchester Minerals Shariah compliant?

For a resources company like Dorchester Minerals, AAOIFI Shariah Standard No. 21 has little quarrel with the product; the scrutiny falls on the financing. Heavy machinery and long project cycles are usually funded with debt, and the standard tolerates interest bearing borrowing only below 30% of market capitalisation.

Does Dorchester Minerals pass the business activity test?

The activity screen is only part of the picture this month: Dorchester Minerals currently fails the non-permissible income screen, so the overall verdict is not compliant regardless of the business itself. The activity itself, extracting and selling resources, raises no Shariah objection; the scrutiny belongs to the financing.

Is Dorchester Minerals' income Halal?

No. Dorchester Minerals' income from impermissible sources currently exceeds AAOIFI's 5% revenue ceiling, which makes the stock non-compliant on this screen regardless of the others. The screen is reassessed monthly, so the status can change when new financial statements arrive.

Does Dorchester Minerals meet AAOIFI's debt and investment ratio requirements?

Yes. Both caps hold this month: interest bearing investments and interest bearing debt each stay below 30% of market capitalisation. Because the caps move with the share price, our Shariah Supervisory Board has DMLP re-screened every month, and the result above always shows the latest verdict.

Tabadulat is an ADGM regulated brokerage whose license covers Shari'a Compliant Regulated Activities, as the FSRA permission names them. New to the terminology? Gharar and Maysir, Sukuk, Zakat and purification are all explained in plain English.

New to the four screens? Read AAOIFI Standards Explained: What Makes a Stock Halal?