Monthly Dividend Stock In Focus: Petrus Resources

Printed on July seventeenth, 2025 by Aristofanis Papadatos

Petrus Assets (PTRUF) has two interesting funding traits:

#1: It’s providing an above-average dividend yield of 8.7%, which is greater than seven occasions the common dividend yield of the S&P 500.

#2: It pays dividends month-to-month as an alternative of quarterly.

Associated: Listing of month-to-month dividend shares

You’ll be able to obtain our full Excel spreadsheet of all month-to-month dividend shares (together with metrics that matter like dividend yields and payout ratios) by clicking on the hyperlink under:

Monthly Dividend Stock In Focus: Petrus Resources

The mix of an above-average dividend yield and a month-to-month dividend makes Petrus Assets a gorgeous choice for particular person traders.

However there’s extra to the corporate than simply these components. Hold studying this text to be taught extra about Petrus Assets.

Enterprise Overview

Petrus Assets is a Canadian oil and gasoline producer that was based in 2015 and relies in Calgary, Alberta. It’s centered on the event of low-cost, liquids-rich pure gasoline and light-weight oil property in Western Canada.

Its operations are concentrated in its core Ferrier space, situated within the Alberta Deep Basin, the place the corporate targets the Cardium formation utilizing horizontal drilling and multi-stage fracturing. Petrus Assets maintains full operatorship and excessive working pursuits in its property and thus it achieves tight value management and capital effectivity.

The output of Petrus Assets is 33% oil and 67% pure gasoline. Consequently, the corporate is very delicate to the dramatic cycles of the costs of oil and gasoline, notably the latter. It has incurred losses in 7 of the final 10 years and has exhibited a markedly unstable efficiency file, which has been clearly mirrored within the inventory worth.

To offer a perspective, the inventory slumped 95% between 2017 and 2020. In 2015, it incurred extreme losses attributable to a steep lower within the costs of oil and gasoline. The corporate initiated a dividend solely in late 2023.

However, Petrus Assets has some benefits in comparison with well-known oil and gasoline producers. Most oil and gasoline producers have been struggling to replenish their reserves as a result of pure decline of their producing wells.

Supply: Investor Presentation

Petrus Assets tremendously advantages from the prime quality and low decline fee of its reserves within the Deep Basin in Alberta. As proven above, the corporate has grown its manufacturing by 56% over the past 4 years.

That is undoubtedly a powerful manufacturing development fee, which can’t be achieved by the well-known oil majors, similar to Exxon Mobil (XOM) and Chevron (CVX).

Within the first quarter of this yr, Petrus Assets reported a slight lower in its manufacturing over the prior yr’s quarter. Given additionally the impact of a major lower within the common realized costs of oil and gasoline, the adjusted funds move per share of the corporate declined 18%, from $0.11 to $0.09.

As 67% of the output of Petrus Assets is pure gasoline, it is very important look at the outlook of the U.S. pure gasoline market. Complete U.S. manufacturing is anticipated to develop 3% this yr, to a brand new all-time excessive, however U.S. LNG exports are anticipated to surge to an all-time excessive as properly. LNG exports are anticipated to continue to grow subsequent yr.

Because of the increase in LNG exports, the U.S. gasoline market has develop into tighter this yr and thus the value of pure gasoline has considerably elevated.

As per the newest forecast of the Power Data Administration [EIA], the value of pure gasoline is more likely to enhance additional subsequent yr, from an anticipated common worth of $3.70 this yr to $4.40 subsequent yr.

This outlook actually bodes properly for the enterprise of Petrus Assets. Nonetheless, attributable to a major lower within the worth of oil and a weak begin to the yr, we anticipate funds move per share to lower from $0.29 in 2024 to $0.25 in 2025.

Development Prospects

As talked about above, Petrus Assets has grown its manufacturing at a quick tempo over the past 4 years. As well as, it’s ideally positioned to profit from doubtlessly larger gasoline costs subsequent yr because of a decent pure gasoline market.

Supply: Investor Presentation

However, traders ought to at all times be mindful the dramatic cyclicality of the value of pure gasoline. That worth skyrocketed to a 13-year excessive in 2022, shortly after the onset of the warfare in Ukraine, however plunged to pre-war lows in lower than a yr attributable to an abnormally heat winter. The worth of pure gasoline remained depressed till this yr.

Now we have assumed flat funds move per share for Petrus Assets in 5 years from now with a view to be on the secure aspect, given the excessive cyclicality of the value of pure gasoline.

Petrus Assets has an honest stability sheet. Its curiosity expense consumes 13% of its working revenue whereas its web debt is $79 million, which is 59% of the market capitalization of the inventory. Underneath regular enterprise situations, the corporate is just not more likely to have any downside servicing its debt.

However, within the occasion of a extreme and extended downturn, the inventory of Petrus Assets is more likely to come below nice stress, as expertise has proven.

Dividend & Valuation Evaluation

Petrus Assets is at present providing an above-average dividend yield of 8.7%, which is greater than seven occasions the 1.2% yield of the S&P 500. The inventory is an attention-grabbing candidate for revenue traders, however they need to bear in mind that the dividend is just not secure as a result of dramatic cycles of the costs of oil and gasoline.

Petrus Assets has an inexpensive payout ratio of 36%, which supplies an honest margin of security for the dividend below the prevailing enterprise situations. Furthermore, because of its promising development prospects, the corporate is just not more likely to minimize its dividend sharply within the absence of a serious downturn.

In reference to the valuation, Petrus Assets is at present buying and selling for 4.1 occasions its anticipated funds move per share this yr. Given the excessive cyclicality of the corporate, we assume a good price-to-funds move ratio of three.0.

Due to this fact, the present funds move a number of is larger than our assumed honest price-to-funds move ratio. If the inventory trades at its honest valuation degree in 5 years, it’s going to incur a 6.1% annualized drag in its returns.

Taking into consideration flat funds move per share in 5 years from now, the 8.7% present dividend yield but in addition a 6.1% annualized headwind of valuation degree, Petrus Assets may provide a 3.1% common annual whole return over the following 5 years. The anticipated return indicators that the inventory is just not enticing proper now.

Ultimate Ideas

Petrus Assets has promising development prospects because of manufacturing development and anticipated larger gasoline costs subsequent yr amid a decent gasoline market. The inventory is providing an above-average dividend yield of 8.7% however it seems virtually absolutely valued. Due to this fact, traders ought to most likely anticipate a considerably decrease entry level.

Furthermore, the corporate has confirmed extremely weak to the cycles of the costs of oil and gasoline. Consequently, it’s appropriate just for affected person traders, who can endure excessive inventory worth volatility.