Peyto Exploration and Development (TSX:PEY) is a Calgary-based energy company involved in the development and production of natural gas in Alberta’s deep basin.
Shares have dropped 12.1% in 2019 as of close on April 29. The stock has plunged 49% from the prior year. It closed at a 52-week low of $6.22 on April 29.
The company released its fourth-quarter and full-year results for 2018 on March 6. Peyto reported its 19th consecutive year of profits in 2018 and posted annual earnings of $129 million which represented 20% of revenue.
Funds from operations fell 17% from the prior year to $474 million or $2.87 per share, primarily due to lower production and a drop in natural gas prices.
For 2019 the company forecasts another year of material debt reduction as it moves forward in executing its five-year plan. It expects to improve its balance sheet in 2019 to position itself for the next decade, but is this enough reason to stash the stock today?
Peyto announced a monthly dividend of $0.02 on April 15. It recently dropped its monthly dividend payment from $0.06 per share to $0.02. This now represents a 3.8% dividend yield. The payment dwarfs its original offering, but it is worth considering at Peyto’s current price.
Peyto stock had an RSI of 31 as of close on April 29. This puts the stock just outside of oversold territory. Investors looking for natural gas exposure and a bit of income to boot should consider this bargain bin stock.
