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Whitecap Resources: 8% Fully Covered Yield With 100% Upside Potential

Published Wed, 10 Jul 2019 08:35:00 -0400 on Seeking Alpha

Co-produced withTrapping Value and Treading Softly for High Dividend Opportunities
Note: All Amounts disclosed are in Canadian dollars unless indicated as USD
Whitecap Resources (OTCPK: SPGYF) is an intermediate oil and gas producer that has shown spectacular growth over the last decade.

Source:Whitecap presentation
Even though oil prices are significantly below levels seen in 2014, Whitecap's cash flow in 2018 was 40% higher than what it achieved in 2014. This has been managed through a steady focus on low operational costs and early acquisition of high quality acreage. The market however has decided to look the other way and the stock is hovering near is 52 week lows.
Data byYCharts
We take a deeper dive to see if this one merits an investment and whether its massive dividend yield of 8% is sustainable.
Company Profile
Whitecap has grown to a midcap tier size while focusing on producing high netback liquids and staying (mostly) out of low netback natural gas.

Source:Whitecap presentation
In May of this year it raised its dividend and now the dividend yield is 8.0%. Unlike many other energy companies, Whitecap pays its dividends monthly.
Current metrics
For 2019 Whitecap forecasts $1.56 in funds flow per share at $55 WTI USD oil prices.

Source:Whitecap presentation
The dividend will consume just about 22% of total funds flow. Investors in the REIT space might equate this funds flow with the funds from... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
EXXON MOBIL 71.98   17.3 4.15 3.48 4.83
CANADIAN NATURAL RESOURCES 25.35   8.4 3.00 1.13 4.32
CHEVRON 121.42   15.7 7.72 4.76 3.91

EXXON MOBIL - XOM
EXXON MOBIL - XOM  


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