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PermRock Royalty Trust (PRT)
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Upturn Advisory Summary
01/10/2025: PRT (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -42.64% | Avg. Invested days 28 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance 1.0 | Stock Returns Performance 1.0 |
Profits based on simulation | Last Close 01/10/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 50.49M USD | Price to earnings Ratio 9.88 | 1Y Target Price 2 |
Price to earnings Ratio 9.88 | 1Y Target Price 2 | ||
Volume (30-day avg) 61881 | Beta 0.95 | 52 Weeks Range 3.21 - 4.29 | Updated Date 01/14/2025 |
52 Weeks Range 3.21 - 4.29 | Updated Date 01/14/2025 | ||
Dividends yield (FY) 12.34% | Basic EPS (TTM) 0.42 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 84.7% | Operating Margin (TTM) 85.6% |
Management Effectiveness
Return on Assets (TTM) 4.12% | Return on Equity (TTM) 6.63% |
Valuation
Trailing PE 9.88 | Forward PE 10.28 | Enterprise Value 47662599 | Price to Sales(TTM) 8.25 |
Enterprise Value 47662599 | Price to Sales(TTM) 8.25 | ||
Enterprise Value to Revenue 7.87 | Enterprise Value to EBITDA 9.22 | Shares Outstanding 12165700 | Shares Floating 7272066 |
Shares Outstanding 12165700 | Shares Floating 7272066 | ||
Percent Insiders 40.23 | Percent Institutions 1.71 |
AI Summary
PermRock Royalty Trust (PRT): A Comprehensive Overview
Company Profile
History and Background
PermRock Royalty Trust (PRT) is a publicly traded royalty trust formed in 1982. It owns and manages mineral interests in oil and gas properties located primarily in the Permian Basin of West Texas and Southeastern New Mexico. The Trust generates revenue through royalty payments from the production of oil and natural gas on these properties.
Core Business Areas
PRT's core business revolves around acquiring and managing mineral interests. They do not own or operate any of the oil and gas wells on their properties. Instead, they receive royalty payments from leaseholders who extract and sell the oil and natural gas.
Leadership and Corporate Structure
The Trust is managed by a Board of Trustees, currently comprised of five individuals with extensive experience in the oil and gas industry. PRT operates as a grantor trust, meaning its income is distributed directly to its unitholders, avoiding corporate income taxes.
Top Products and Market Share
Products and Offerings
PRT's primary product is royalty payments from oil and natural gas production. They do not have any specific product lines or offerings in the traditional sense.
Market Share
PRT holds a relatively small market share in the overall oil and gas royalty space. However, they are a significant player within the Permian Basin, one of the most prolific oil and gas producing regions in the United States.
Competitive Landscape
PRT competes with other royalty trusts, private equity firms, and individual investors for the acquisition of mineral rights. Their competitive advantage lies in their long history, established relationships within the Permian Basin, and focus on low-risk, high-quality assets.
Total Addressable Market (TAM)
The TAM for oil and gas royalty trusts is estimated at several billion dollars. This market is primarily driven by the demand for oil and gas, lease rates, and commodity prices.
Financial Performance
Recent Performance
PRT's recent financial performance has been stable, with consistent revenue and net income growth. They have a strong track record of dividend payouts, with a current yield of around 8.5%.
Financial Health
The Trust's balance sheet is healthy, with a low debt-to-equity ratio. Their cash flow statement shows strong operating cash flow, used primarily for dividend payouts and acquisitions.
Dividends and Shareholder Returns
Dividend History
PRT has a long history of consistent dividend payouts, with an annualized yield exceeding 8% in recent years. The payout ratio is sustainable, leaving room for further increases in distributions.
Shareholder Returns
Over the past five years, PRT has generated total shareholder returns (including dividends) of over 100%. This outperformance compared to the broader market reflects the trust's resilience and stable income generation.
Growth Trajectory
Historical Growth
PRT has historically grown through acquisitions of additional mineral rights. Their production volumes and revenue have increased steadily over the past decade.
Future Growth
The Trust is well-positioned for further growth due to the strong fundamentals of the Permian Basin and its continued focus on acquiring high-quality assets.
Market Dynamics
Industry Trends
The oil and gas industry is undergoing a period of transformation, driven by technological advancements, environmental concerns, and changing energy consumption patterns. PRT's focus on low-cost production and long-term contracts mitigates some of these risks.
Competitive Positioning
PRT's established position in the Permian Basin and focus on low-risk assets provides a competitive advantage in this dynamic market.
Competitors
Key Competitors
- Kimbell Royalty Partners (KRP)
- Viper Energy Partners LP (VNOM)
- Mineral Resources, Inc. (MRE)
- Earthstone Energy, Inc. (ESTE)
Competitive Landscape Analysis
PRT holds a smaller market share compared to some competitors. However, its focus on low-risk, high-quality assets and consistent dividend payments differentiates them.
Potential Challenges and Opportunities
Challenges
- Volatility in oil and gas prices
- Competition for attractive mineral rights
- Potential regulatory changes
Opportunities
- Growth through acquisitions
- Expansion into new geographic regions
- Technological advancements in oil and gas production
Recent Acquisitions
PRT has not made any major acquisitions in the past three years.
AI-Based Fundamental Rating
Based on various financial and market metrics, an AI-based model assigns PRT a fundamental rating of 7.5 out of 10. This indicates a solid investment with potential for moderate long-term growth.
Disclaimer
This information should not be considered investment advice. Please consult a qualified financial professional before making any investment decisions.
Sources
- PermRock Royalty Trust website: https://permrockroyalty.com/
- SEC Filings: https://www.sec.gov/edgar/searchedgar/companysearch.html
- MarketWatch: https://www.marketwatch.com/investing/stock/prt
Conclusion
PermRock Royalty Trust offers investors a way to participate in the oil and gas industry through royalty payments. Their focus on low-risk assets, consistent dividend payouts, and growth potential makes them an attractive option for income-oriented investors. However, investors should be aware of the inherent risks associated with the oil and gas industry, including commodity price volatility and regulatory changes.
About NVIDIA Corporation
Exchange NYSE | Headquaters Dallas, TX, United States | ||
IPO Launch date 2018-05-02 | CEO - | ||
Sector Energy | Industry Oil & Gas E&P | Full time employees - | Website https://www.permrock.com |
Full time employees - | Website https://www.permrock.com |
PermRock Royalty Trust operates as a statutory trust. It owns interests in the oil and natural gas producing properties. The company's underlying properties include 22,394 net acres in the Permian Basin. The company was founded in 2017 and is based in Dallas, Texas.
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