Month-to-month Dividend Inventory In Focus: Petrus Assets – Certain Dividend

Revealed 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 instances the common dividend yield of the S&P 500.

#2: It pays dividends month-to-month as a substitute of quarterly.

Associated: Listing of month-to-month dividend shares

You may 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:

The mix of an above-average dividend yield and a month-to-month dividend makes Petrus Assets a sexy possibility for particular person buyers.

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

Enterprise Overview

Petrus Assets is a Canadian oil and fuel producer that was based in 2015 and relies in Calgary, Alberta. It’s centered on the event of low-cost, liquids-rich pure fuel and light-weight oil belongings 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 belongings and thus it achieves tight value management and capital effectivity.

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

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

Then again, Petrus Assets has some benefits in comparison with well-known oil and fuel producers. Most oil and fuel producers have been struggling to replenish their reserves because of the pure decline of their producing wells.

Supply: Investor Presentation

Petrus Assets drastically advantages from the top quality and low decline charge 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 formidable manufacturing development charge, which can’t be achieved by the well-known oil majors, comparable 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 fuel, 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 fuel, it is very important look at the outlook of the U.S. pure fuel market. Whole U.S. manufacturing is predicted 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 nicely. LNG exports are anticipated to continue to grow subsequent yr.

As a result of growth in LNG exports, the U.S. fuel market has change into tighter this yr and thus the worth of pure fuel has considerably elevated.

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

This outlook actually bodes nicely for the enterprise of Petrus Assets. However, as a result of a major lower within the worth of oil and a weak begin to the yr, we count on 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 learn from doubtlessly increased fuel costs subsequent yr due to a good pure fuel market.

Supply: Investor Presentation

Then again, buyers ought to at all times take into accout the dramatic cyclicality of the worth of pure fuel. That worth skyrocketed to a 13-year excessive in 2022, shortly after the onset of the conflict in Ukraine, however plunged to pre-war lows in lower than a yr as a result of an abnormally heat winter. The value of pure fuel remained depressed till this yr.

We have now assumed flat funds move per share for Petrus Assets in 5 years from now as a way to be on the protected facet, given the excessive cyclicality of the worth of pure fuel.

Petrus Assets has a good stability sheet. Its curiosity expense consumes 13% of its working earnings whereas its web debt is $79 million, which is 59% of the market capitalization of the inventory. Beneath regular enterprise circumstances, the corporate will not be more likely to have any drawback servicing its debt.

Then again, within the occasion of a extreme and extended downturn, the inventory of Petrus Assets is more likely to come below nice strain, 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 instances the 1.2% yield of the S&P 500. The inventory is an fascinating candidate for earnings buyers, however they need to bear in mind that the dividend will not be protected because of the dramatic cycles of the costs of oil and fuel.

Petrus Assets has an affordable payout ratio of 36%, which gives a good margin of security for the dividend below the prevailing enterprise circumstances. Furthermore, due to its promising development prospects, the corporate will not be more likely to lower 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 instances 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.

Subsequently, the present funds move a number of is increased than our assumed truthful price-to-funds move ratio. If the inventory trades at its truthful valuation degree in 5 years, it would 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 additionally a 6.1% annualized headwind of valuation degree, Petrus Assets may provide a 3.1% common annual complete return over the following 5 years. The anticipated return alerts that the inventory will not be enticing proper now.

Last Ideas

Petrus Assets has promising development prospects due to manufacturing development and anticipated increased fuel costs subsequent yr amid a good fuel market. The inventory is providing an above-average dividend yield of 8.7% nevertheless it seems virtually absolutely valued. Subsequently, buyers ought to in all probability look forward to a considerably decrease entry level.

Furthermore, the corporate has confirmed extremely susceptible to the cycles of the costs of oil and fuel. In consequence, it’s appropriate just for affected person buyers, who can endure excessive inventory worth volatility.

Extra Studying

Don’t miss the assets under for extra month-to-month dividend inventory investing analysis.

And see the assets under for extra compelling funding concepts for dividend development shares and/or high-yield funding securities.