Fact based stock research
PrairieSky Royalty (TSX:PSK)

CA7397211086

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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PrairieSky Royalty stock research in summary

prairiesky.com

ANALYSIS: With an Obermatt Combined Rank of 31 (worse than 69% compared with investment alternatives), PrairieSky Royalty (Oil & Gas Production, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of PrairieSky Royalty are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives) and show below-average growth (Growth Rank of 13) but are safely financed (Safety Rank of 91), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 31, is a hold recommendation based on PrairieSky Royalty's financial characteristics. As the company PrairieSky Royalty's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 21) and low growth (Obermatt Growth Rank of 13), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 91) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	21
Growth Rank	13
Safety Rank	91
Combined Rank	31

Country	Canada
Industry	Oil & Gas Production
Index	TSX Composite
Size class	Small

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: PrairieSky Royalty

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	25	29	6	21
GROWTH
GROWTH	67	37	29	13
SAFETY
SAFETY	78	94	72	91
SENTIMENT
SENTIMENT	n/a	83	39	^new
360° VIEW
360° VIEW	n/a	67	60	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better PrairieSky Royalty is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	25	29	6	21
GROWTH
GROWTH	67	37	29	13
SAFETY
SAFETY	78	94	72	91
COMBINED
COMBINED	38	58	54	31

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of PrairieSky Royalty the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), PrairieSky Royalty shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for PrairieSky Royalty. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning PrairieSky Royalty's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 21 which means that the stock price compared with what market professionals expect for future profit levels is higher than 79% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 26 is also low. Compared with invested capital, the stock price is higher than for 74% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on PrairieSky Royalty's stock price compared with the company's operational size and dividend yields. Should dividend investors pick PrairieSky Royalty? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose PrairieSky Royalty only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	38	6	5	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	10	9	5	21
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	42	70	27	26
DIVIDEND YIELD
DIVIDEND YIELD	36	85	74	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	25	29	6	21

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of PrairieSky Royalty; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), PrairieSky Royalty shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for PrairieSky Royalty. Sales Growth has a below market rank of 48, which means that, currently, professionals expect the company to grow less than 52% of its competitors. The same is valid for Capital Growth, with a rank of 1, and Profit Growth, with a rank of 14. Currently, professionals expect the company to grow its profits less than 86% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 85, which means that the stock returns have recently been above 85% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for PrairieSky Royalty, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	56	73	20	48
PROFIT GROWTH
PROFIT GROWTH	100	35	60	14
CAPITAL GROWTH
CAPITAL GROWTH	n/a	75	1	1
STOCK RETURNS
STOCK RETURNS	90	17	87	85
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	67	37	29	13

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of PrairieSky Royalty.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 91 (better than 91% compared with alternatives) for 2024, the company PrairieSky Royalty has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of PrairieSky Royalty is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for PrairieSky Royalty. Leverage is at a rank of 90, meaning the company has a below-average debt-to-equity ratio. It has less debt than 90% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 46, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 54% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 91 (better than 91% compared with alternatives), PrairieSky Royalty has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for PrairieSky Royalty. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with PrairieSky Royalty and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	74	91	88	90
REFINANCING
REFINANCING	54	74	65	46
LIQUIDITY
LIQUIDITY	80	98	60	95
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	78	94	72	91

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of PrairieSky Royalty and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	44	13	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	18	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	58	^new
MARKET PULSE
MARKET PULSE	n/a	92	60	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	83	39	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for PrairieSky Royalty.
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