Education
About Us
Working with TipRanks
Follow Us
PrairieSky Royalty (TSE:PSK)
TSX:PSK
Top Page
PrairieSky Royalty
(TSX:PSK)
66Neutral
PrairieSky Royalty (PSK) vs. S&P 500 (SPY)
Market Cap
$6.16B
Dividend Yield3.97%
Average Volume (3M)447.69K
Price to Earnings (P/E)28.6
Beta (1Y)0.66
Revenue Growth-0.78%
EPS Growth-5.44%
CountryCA
Employees75
SectorEnergy
Sector Strength72
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.90
Shares Outstanding239,000,000
10 Day Avg. Volume421,905
30 Day Avg. Volume447,692
Financial Highlights & Ratios
PEG RatioN/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 Ratio22.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$31.92Price Target Upside23.78% Upside
Rating ConsensusHold
Number of Analyst Covering4
PrairieSky Royalty Business Overview & Revenue Model
Company DescriptionPrairieSky Royalty Ltd. is a Canadian company that operates in the oil and gas royalty business. It owns a substantial portfolio of oil, natural gas, and potash royalty interests, primarily in Western Canada. The company's core business revolves around managing and maximizing the value of its extensive land holdings, which span millions of acres, by leasing these lands to exploration and production companies, thereby generating royalty revenues.
How the Company Makes MoneyPrairieSky Royalty Ltd. generates revenue primarily through royalty income, which is derived from its ownership of mineral rights across its vast land base. The company leases these lands to oil and gas producers who conduct exploration and development activities. In return, PrairieSky earns royalties on the production from these lands, typically structured as a percentage of the revenue or production volume. Key revenue streams include royalties from oil, natural gas, and potash. Additionally, PrairieSky may engage in leasing bonuses and land sales, though these are not the primary sources of income. The company's earnings are significantly influenced by commodity prices, production volumes, and the level of activity in the oil and gas sector, as well as its ability to effectively manage its land assets and maintain strategic partnerships with exploration and production companies.
PrairieSky Royalty Financial Statement Overview
Summary
PrairieSky Royalty maintains strong profit margins and cash flow generation, supported by low leverage. However, declining revenue growth is a potential concern for future profitability.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.72
Positive
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.68
Positive
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.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 509.20M | 513.20M | 643.30M | 308.00M | 171.40M | Gross Profit |
| 358.30M | 365.50M | 490.90M | 202.60M | 64.40M | EBIT |
| 0.00 | 314.20M | 434.40M | 162.80M | 39.30M | EBITDA |
| 439.80M | 455.50M | 580.20M | 264.60M | 143.80M | Net Income Common Stockholders |
| 215.30M | 227.60M | 317.50M | 123.30M | 31.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 0.00 | -900.00K | -1.60M | -2.20M | Total Assets |
| 3.21B | 3.31B | 3.42B | 3.51B | 2.61B | Total Debt |
| 95.50M | 188.10M | 219.20M | 645.00M | 45.10M | Net Debt |
| 95.50M | 188.10M | 220.10M | 646.60M | 47.30M | Total Liabilities |
| 465.70M | 541.30M | 647.10M | 915.80M | 266.20M | Stockholders Equity |
| 2.74B | 2.77B | 2.77B | 2.59B | 2.34B |
| Cash Flow | Free Cash Flow | |||
| 330.80M | 261.00M | 534.90M | -733.60M | 142.90M | Operating Cash Flow |
| 379.90M | 318.90M | 565.50M | 252.00M | 152.30M | Investing Cash Flow |
| -49.10M | -57.90M | -30.60M | -986.40M | -8.60M | Financing Cash Flow |
| -330.80M | -261.00M | -534.90M | 734.40M | -143.70M |
PrairieSky Royalty Technical Analysis
Positive
25.79
Price Trends
26.46
Positive
27.37
Negative
27.02
Negative
Market Momentum
-0.12
Negative
46.74
Neutral
14.60
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PSK, the sentiment is Positive. The current price of 25.79 is below the 20-day moving average (MA) of 25.93, below the 50-day MA of 26.46, and below the 200-day MA of 27.02, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 46.74 is Neutral, neither overbought nor oversold. The STOCH value of 14.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PSK.
PrairieSky Royalty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$3.66B | 12.84 | 10.37% | 7.43% | -9.52% | -11.68% | |
68 Neutral | $1.93B | 13.01 | 14.86% | 8.90% | -1.62% | 12.60% | |
66 Neutral | $6.16B | 28.63 | 7.84% | 3.97% | -0.78% | -5.44% | |
62 Neutral | $1.85B | 32.71 | 2.51% | 5.10% | -26.02% | 464.95% | |
62 Neutral | $1.78B | ― | -1.59% | 4.89% | -1.72% | 79.87% | |
62 Neutral | C$3.79B | 77.76 | 3.62% | 5.32% | -2.25% | -3.28% | |
58 Neutral | $9.12B | 5.24 | -7.59% | 7.51% | 0.53% | -65.25% |
* Energy Sector Average
Performance Comparison
TSE:PSK
PrairieSky Royalty
25.79
-1.03
-3.83%
TSE:BIR
Birchcliff Energy
6.58
1.48
29.02%
TSE:FRU
Freehold Royalties
12.29
-1.28
-9.44%
TSE:VET
Vermilion Energy
10.29
-6.34
-38.13%
TSE:PEY
Peyto Exploration & Dev
17.77
3.63
25.67%
TSE:TPZ
Topaz Energy Corp
23.74
2.32
10.83%
PrairieSky Royalty Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -4.76% | Next Earnings Date: Apr 14, 2025
Earnings Call Sentiment Positive
PrairieSky demonstrated strong performance with consistent oil production growth, significant free cash flow generation, and successful acquisitions. However, challenges were noted in the natural gas segment due to pricing issues. Overall, the company's strategic actions and positive financial metrics indicate a positive outlook.Highlights
Consistent Organic Oil Production Growth
PrairieSky achieved a 6% increase in oil production, marking the third consecutive year of high single-digit organic growth rates in oil per debt adjusted share.
Strong Free Cash Flow Generation
The company generated $380.5 million in free cash flow in 2024, maintaining steady cash flow performance year-over-year.
Dividend Increase
PrairieSky announced a 4% increase in its dividend to $1.04 per common share, reflecting confidence in future cash flows.
Successful Acquisitions
PrairieSky closed on four acquisitions totaling $73 million, expected to generate almost 20% IRRs, including significant mineral titles in Southeast Saskatchewan.
Growth in Duvernay Royalty Production
The Duvernay royalty production volumes increased by over 50% in 2024, with expected continued growth in 2025 driven by increased activity.
Leasing Activity and Bonus Issuance
Over 100 counterparties were engaged in leasing activity, resulting in a $30.8 million lease issuance bonus.
Lowlights
Natural Gas and NGL Volume Decline
There was a decline in natural gas and NGL volumes throughout the year due to weak natural gas pricing.
Lower Gas Reserves
Gas reserves decreased modestly due to the economic impact of lower pricing.
Higher Average Royalty Rate in 2023
The average royalty rate in 2023 was high due to high net royalty wells, which contracted to a more normalized level in 2024.
Company Guidance
During the fourth quarter of 2024, PrairieSky Royalty achieved significant milestones, including a 6% organic growth in oil production, contributing to a total of 9.32 million barrels of royalty production for the year. This production generated $380.5 million in free cash flow, while oil reserves saw a 3.5% increase. The company also successfully completed four acquisitions totaling $73 million, expected to yield nearly 20% IRRs. Additionally, the rig count in Western Canada rose to 258 at the start of the year, signaling increased activity in the region. PrairieSky announced a 4% increase in its dividend to $1.04 per share, reflecting its strong financial performance and confidence in continued growth.PrairieSky Royalty Corporate Events
Dividends
PrairieSky Royalty Declares Quarterly Dividend of CDN $0.26
Positive
Mar 10, 2025
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.
DividendsBusiness Operations and StrategyFinancial Disclosures
PrairieSky Royalty Reports Record Oil Production and Dividend Growth for 2024
Positive
Feb 10, 2025
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.
Financial Disclosures
PrairieSky Royalty to Announce 2024 Financial Results
Neutral
Jan 31, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.