PrairieSky Royalty (PSK) AI Stock Analysis

• Market Cap: C$6.19B
• Dividend Yield: 4.07%
• Average Volume (3M): 399.18K
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.72
• Revenue Growth: -0.78%
• EPS Growth: -5.44%
• Country: CA
• Employees: 65
• Sector: Energy
• Sector Strength: 72
• Industry: Fossil Fuels
• EPS (TTM): 0.90
• Shares Outstanding: 239,000,000
• 10 Day Avg. Volume: 552,990
• 30 Day Avg. Volume: 399,175
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.08
• Price to Cash Flow (P/CF): 16.90
• P/FCF Ratio: 22.20
• 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: C$31.50
• Price Target Upside: 20.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

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.

PrairieSky Royalty Business Overview & Revenue Model

Company Description

PrairieSky 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 Money

PrairieSky 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.

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
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

• Technical Analysis Sentiment: Negative
• Last Price: 26.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 26.14 is below the 20-day moving average (MA) of 26.63, below the 50-day MA of 27.31, and below the 200-day MA of 27.24, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 38.80 is Neutral, neither overbought nor oversold. The STOCH value of 27.53 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
FRU	76 Outperform	$1.84B	13.88	14.31%	9.29%	-6.11%	-4.12%
PEY	73 Outperform	C$3.11B	10.23	11.55%	8.44%	-14.63%	-18.40%
BIR	71 Outperform	$1.38B	24.32	0.70%	8.30%	-8.89%	-82.18%
PSK	66 Neutral	C$6.19B	28.74	7.84%	4.07%	-0.78%	-5.44%
VET	62 Neutral	$1.73B	―	-1.59%	4.56%	-1.72%	79.87%
TPZ	62 Neutral	C$3.62B	74.38	3.62%	5.52%	-2.25%	-3.28%
Sector *	57 Neutral	$8.36B	5.47	-5.51%	7.41%	0.15%	-68.69%

PrairieSky Royalty Corporate Events

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.

PrairieSky Royalty Amends Credit Facility Strategy

PrairieSky Royalty Ltd. has amended and extended its revolving credit facility, reducing it from $725 million to $350 million, aligning with its strategy to maintain a strong balance sheet. The facility allows for an increase up to $600 million with lender consent, and all other covenants remain unchanged.