PrairieSky Royalty (PSK) AI Stock Analysis

• Market Cap: $5.43B
• Dividend Yield: 4.26%
• Average Volume (3M): 547.98K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.73
• Revenue Growth: 1.73%
• EPS Growth: 3.68%
• Country: CA
• Employees: 75
• Sector: Energy
• Sector Strength: 50
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.25
• Shares Outstanding: 239,000,000
• 10 Day Avg. Volume: 692,282
• 30 Day Avg. Volume: 547,978
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.27
• Price to Cash Flow (P/CF): 17.20
• P/FCF Ratio: 22.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $30.72
• Price Target Upside: 29.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

PrairieSky Royalty demonstrates overall strong financial health and strategic growth in oil production, supported by a sustainable dividend policy. However, technical analysis reflects caution due to bearish momentum, and valuation metrics indicate potential overvaluation. Challenges in natural gas production and market volatility pose risks, impacting the overall score.

Positive Factors

Business Strength

PrairieSky is one of the strongest business platforms in the basin, given its unique royalty assets, top profitability, and low debt.

Oil Production

Oil volumes grew 3% compared to the same quarter last year, largely driven by the Clearwater and Mannville Stack plays.

Shareholder Value

The company made clear its NCIB will be much more active going forward as it relates to shareholder value.

Negative Factors

Investment Recommendation

Q3/24 results in line; reiterate HOLD, C$28.00 target.

Stock Valuation

PrairieSky's recent share purchase activity reflects how management sees the valuation premise today, which likely serves as a back-stop.

PrairieSky Royalty Business Overview & Revenue Model

Company Description

PrairieSky Royalty (PSK) is a Canadian company operating in the oil and gas sector. It is primarily engaged in owning and managing a vast portfolio of petroleum and natural gas royalty properties across Canada. The company's core service is the collection of royalty income from oil and gas production on its lands, which it leases to exploration and production companies.

How the Company Makes Money

PrairieSky Royalty generates revenue primarily through the collection of royalties on the oil and gas produced from its extensive land holdings. The company leases these lands to exploration and production companies, who then extract the resources. In return, PrairieSky receives a percentage of the revenue generated from the production, known as a royalty. This model allows the company to earn income without directly engaging in the costly and risky process of exploration and production. Additionally, PrairieSky benefits from a diversified portfolio of land, which includes a variety of oil and gas plays, reducing its exposure to any single project or commodity price fluctuations. The company's earnings are also supplemented by strategic partnerships and agreements with various oil and gas operators, enhancing its ability to maximize royalty income.

PrairieSky Royalty Financial Statement Overview

Summary

PrairieSky Royalty demonstrates a strong financial position with healthy profit margins and robust cash flow generation. The company maintains low leverage, enhancing financial stability. However, challenges in revenue growth present a potential risk that could affect future profitability if not addressed.

Income Statement

PrairieSky Royalty has shown resilience in maintaining steady profitability despite a decline in total revenue over the TTM period. The gross profit margin is strong at 70.4%, indicating efficient cost management. However, the revenue growth rate is negative due to a decrease from the previous year, signaling challenges in top-line growth. Net profit margin remains healthy at 42.3%, but the declining revenue trend could be a concern. Both EBIT and EBITDA margins are robust, highlighting the company's operational efficiency.

Balance Sheet

The balance sheet reflects a solid equity base with a debt-to-equity ratio of 0.03, indicating low leverage and financial stability. Return on equity is strong at 7.85%, though slightly lower than the previous year, which could indicate challenges in generating returns on equity. The equity ratio is high at 85.5%, showcasing a strong equity position relative to total assets, providing a cushion against liabilities.

Cash Flow

Cash flow analysis shows a positive trajectory with a healthy operating cash flow to net income ratio of 1.76, demonstrating strong cash conversion efficiency. Free cash flow has grown significantly, improving from the previous year, which supports strategic flexibility and potential shareholder returns. The free cash flow to net income ratio is favorable at 1.54, indicating efficient cash generation capabilities relative to earnings.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
516.60M	509.20M	513.20M	643.30M	308.00M	171.40M
	Gross Profit
366.80M	358.30M	365.50M	490.90M	202.60M	64.40M
	EBIT
306.20M	292.80M	314.20M	434.40M	162.80M	39.30M
	EBITDA
452.40M	439.80M	455.50M	580.20M	264.60M	143.80M
	Net Income Common Stockholders
226.20M	215.30M	227.60M	317.50M	123.30M	31.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	0.00	0.00	-900.00K	-1.60M	-2.20M
	Total Assets
3.27B	3.21B	3.31B	3.42B	3.51B	2.61B
	Total Debt
220.30M	95.50M	188.10M	219.20M	645.00M	45.10M
	Net Debt
220.30M	95.50M	188.10M	220.10M	646.60M	47.30M
	Total Liabilities
618.10M	465.70M	541.30M	647.10M	915.80M	266.20M
	Stockholders Equity
2.65B	2.74B	2.77B	2.77B	2.59B	2.34B
Cash Flow		Free Cash Flow
287.00M	330.80M	261.00M	534.90M	-733.60M	142.90M
	Operating Cash Flow
390.90M	379.90M	318.90M	565.50M	252.00M	152.30M
	Investing Cash Flow
-103.90M	-49.10M	-57.90M	-30.60M	-986.40M	-8.60M
	Financing Cash Flow
-287.00M	-330.80M	-261.00M	-534.90M	734.40M	-143.70M

PrairieSky Royalty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PSK, the sentiment is Negative. The current price of 23.64 is below the 20-day moving average (MA) of 24.21, below the 50-day MA of 25.38, and below the 200-day MA of 26.86, indicating a bearish trend. The MACD of -0.62 indicates Negative momentum. The RSI at 42.78 is Neutral, neither overbought nor oversold. The STOCH value of 70.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PSK.

PrairieSky Royalty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEY	74 Outperform	C$3.57B	12.49	10.37%	7.37%	-9.52%	-11.68%
FRU	72 Outperform	$1.95B	11.97	14.86%	9.11%	-1.62%	12.60%
TPZ	68 Neutral	C$3.62B	73.97	3.62%	5.59%	-2.25%	-3.28%
PSK	65 Neutral	$5.43B	25.21	8.39%	4.26%	1.73%	3.68%
VET	63 Neutral	$1.36B	―	-1.59%	5.64%	-1.72%	79.87%
BIR	62 Neutral	C$1.64B	29.02	2.51%	5.48%	-26.02%	464.95%
Sector *	55 Neutral	$7.11B	3.51	-6.23%	6.00%	>-0.01%	-51.70%

PrairieSky Royalty Corporate Events

PrairieSky Royalty Secures Shareholder Approval for Key Resolutions

PrairieSky Royalty Ltd. announced that all resolutions were approved at its annual general meeting of shareholders, including the appointment of seven directors and KPMG LLP as auditors. The approval of these resolutions reflects strong shareholder support for the company’s leadership and strategic direction.

Spark’s Take on TSE:PSK Stock

According to Spark, TipRanks’ AI Analyst, TSE:PSK is a Neutral.

PrairieSky Royalty’s overall stock score is driven by its robust financial health and positive earnings call highlights, including strong oil production growth and dividend increases. However, technical analysis suggests caution due to current downward momentum, and valuation metrics indicate the stock might be expensive. Natural gas and NGL challenges also pose risks that could affect future performance.

To see Spark’s full report on TSE:PSK stock, click here.

PrairieSky Royalty Reports Record Oil Production and Strategic Acquisitions in Q1 2025

PrairieSky Royalty Ltd. reported its first quarter 2025 results, highlighting a record oil royalty production of 13,502 barrels per day, contributing to a 10% increase in oil royalty revenue over the previous year. Despite a 3% decrease in total royalty production due to declines in natural gas and NGL production, the company achieved total revenues of $128.1 million. PrairieSky declared a dividend of $61.2 million and continued its capital allocation strategy by purchasing and cancelling shares under its normal course issuer bid. The company also completed acquisitions of royalty interests, enhancing its portfolio in key oil plays.

Spark’s Take on TSE:PSK Stock

According to Spark, TipRanks’ AI Analyst, TSE:PSK is a Neutral.

PrairieSky Royalty’s overall stock score is driven by its robust financial health and positive earnings call highlights, including strong oil production growth and dividend increases. However, technical analysis suggests caution due to current downward momentum, and valuation metrics indicate the stock might be expensive. Natural gas and NGL challenges also pose risks that could affect future performance.

To see Spark’s full report on TSE:PSK stock, click here.

PrairieSky Royalty Declares Quarterly Dividend of CDN $0.26

PrairieSky Royalty Ltd. has declared a quarterly dividend of CDN $0.26 per common share, payable on April 15, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and underscores its strong financial position, supported by its extensive portfolio of revenue-generating properties.

PrairieSky Royalty Reports Record Oil Production and Dividend Growth for 2024

PrairieSky Royalty Ltd. announced record annual oil royalty production for 2024, with a significant increase in both oil volume and annual dividend policy. Despite a decline in natural gas and NGL production, the company achieved a 6% rise in oil royalty production, contributing to total revenues of $509.2 million. The improved performance is attributed to strategic investments in low-cost oil plays, particularly in the Clearwater and Mannville Stack regions. The company also reduced net debt by 39% and increased its annual dividend by 4%, reflecting strong financial health and commitment to shareholder returns.

PrairieSky Royalty to Announce 2024 Financial Results

PrairieSky Royalty Ltd. has announced the release of its 2024 annual and fourth quarter results, scheduled for February 10, 2025, after market closure. The announcement will include comprehensive operating and financial data, with further details available on their website and SEDAR+. A conference call for the investment community is set for February 11, 2025, providing an opportunity for stakeholders to discuss the results and their implications for PrairieSky’s operations and market positioning.