Cardinal Energy Ltd. (CRLFF)
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Cardinal Energy: It's Fairly Valued With An Attractive Yield
Cardinal Energy Ltd. showcases resilience amid global economic challenges, maintaining stable profitability and liquidity through prudent pricing strategies and favorable USD/CAD currency ties. Despite a slight revenue dip in Q4, CRLFF's strategic production adjustments and increased medium/heavy oil demand helped stabilize performance and enhance efficiency. CRLFF's sustainable business model, disciplined capex, and attractive dividend yield make it a promising investment, though traders should await confirmation of a bullish breakout.
Cardinal Energy: 12% Dividend Yield And A 8.5% YTM On New Debentures
Cardinal Energy's new debenture offers an attractive 8.25% coupon, providing a 600 bps markup over Canadian government bond yields, with a yield to maturity of 8.55%. The company's heavy oil project completion will significantly boost free cash flow, allowing rapid repayment of bank debt and enhancing financial stability. Cardinal's pre-dividend free cash flow at $70 WTI is projected to be C$197M, indicating strong repayment capacity and dividend coverage.
Cardinal Energy: Offering An 11% Dividend Yield While Investing In Growth
Cardinal Energy's consistent production rate and liquidity support its ongoing Saskatchewan project despite WTI oil price drops below $70/barrel. Q3 saw a 3% production decrease but a 10% revenue dip, with net profit at C$25.1M and EPS of C$0.16. Free cash flow was positive at C$30M, covering the dividend, but high capex and dividends are not fully covered.
Cardinal Energy: Higher Production And Earnings Are Expected From 2025
Cardinal Energy had a strong operating performance in Q2 with 22,376 boe/d in production and substantial cash flow generation despite minor natural gas curtailments. The company benefited from a favorable oil price, a weaker Canadian Dollar, and a smaller WCS-WTI differential, resulting in a C$83/boe realized sales price and a C$43/boe netback. Cardinal Energy's liquidity situation is solid, supporting its 11.0% dividend yield and the Reford thermal growth project.
Cardinal Energy: Current Oil Price Should Not Jeopardize The 11% Dividend
Cardinal Energy pays an attractive monthly dividend of C$0.06 per share, yielding over 11%. Company's production increase of 6,000 barrels of oil per day may lead to increased net debt in the next few years before the new project starts contributing. Cardinal Energy's growth prospects, reduced net debt, and potential strong Q2 cash flow make it an appealing investment for dividend income and growth.
