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

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 typical dividend yield of the S&P 500.

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

Associated: Record of month-to-month dividend shares

You possibly can 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 beneath:

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

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 is predicated in Calgary, Alberta. It’s targeted on the event of low-cost, liquids-rich pure fuel 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 price management and capital effectivity.

The output of Petrus Assets is 33% oil and 67% pure fuel. Because of this, the corporate is extremely delicate to the dramatic cycles of the costs of oil and fuel, significantly 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 value.

To offer a perspective, the inventory slumped 95% between 2017 and 2020. In 2015, it incurred extreme losses because 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 vastly advantages from the top 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 formidable manufacturing progress fee, which can’t be achieved by the well-known oil majors, equivalent to Exxon Mobil (XOM) and Chevron (CVX).

Within the first quarter of this 12 months, Petrus Assets reported a slight lower in its manufacturing over the prior 12 months’s quarter. Given additionally the impact of a big lower within the common realized costs of oil and fuel, the adjusted funds circulation 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 study the outlook of the U.S. pure fuel market. Complete U.S. manufacturing is predicted to develop 3% this 12 months, to a brand new all-time excessive, however U.S. LNG exports are anticipated to surge to an all-time excessive as effectively. LNG exports are anticipated to continue to grow subsequent 12 months.

As a result of increase in LNG exports, the U.S. fuel market has grow to be tighter this 12 months and thus the value of pure fuel has considerably elevated.

As per the most recent forecast of the Vitality Data Administration [EIA], the value of pure fuel is more likely to improve additional subsequent 12 months, from an anticipated common value of $3.70 this 12 months to $4.40 subsequent 12 months.

This outlook definitely bodes effectively for the enterprise of Petrus Assets. However, because of a big lower within the value of oil and a weak begin to the 12 months, we anticipate funds circulation 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 fuel costs subsequent 12 months due to a decent pure fuel market.

Supply: Investor Presentation

Then again, traders ought to all the time take into account the dramatic cyclicality of the value of pure fuel. That value 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 12 months because of an abnormally heat winter. The value of pure fuel remained depressed till this 12 months.

We’ve assumed flat funds circulation per share for Petrus Assets in 5 years from now in an effort to be on the secure facet, given the excessive cyclicality of the value of pure fuel.

Petrus Assets has a good 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 will not be more likely to have any downside servicing its debt.

Then again, within the occasion of a extreme and extended downturn, the inventory of Petrus Assets is more likely to come underneath nice strain, as expertise has proven.

Dividend & Valuation Evaluation

Petrus Assets is presently 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 fascinating candidate for revenue traders, however they need to bear in mind that the dividend will not be secure because of the dramatic cycles of the costs of oil and fuel.

Petrus Assets has an inexpensive payout ratio of 36%, which gives a good margin of security for the dividend underneath the prevailing enterprise situations. Furthermore, due to its promising progress prospects, the corporate will not be more likely to reduce its dividend sharply within the absence of a significant downturn.

In reference to the valuation, Petrus Assets is presently buying and selling for 4.1 occasions its anticipated funds circulation per share this 12 months. Given the excessive cyclicality of the corporate, we assume a good price-to-funds circulation ratio of three.0.

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

Bearing in mind flat funds circulation 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 might supply a 3.1% common annual whole return over the following 5 years. The anticipated return indicators that the inventory will not be enticing proper now.

Remaining Ideas

Petrus Assets has promising progress prospects due to manufacturing progress and anticipated larger fuel costs subsequent 12 months amid a decent fuel market. The inventory is providing an above-average dividend yield of 8.7% nevertheless it seems nearly absolutely valued. Due to this fact, traders ought to most likely 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. Because of this, it’s appropriate just for affected person traders, who can endure excessive inventory value volatility.

Extra Studying

Don’t miss the sources beneath for extra month-to-month dividend inventory investing analysis.

And see the sources beneath for extra compelling funding concepts for dividend progress shares and/or high-yield funding securities.