Brigham Minerals (MNRL) Update - Feb 6

[dan_s]

I have updated my forecast/valuation model for Brigham Minerals and posted it to the EPG website. You can view it from the home page.

MNRL closed at $14.64 on Feb. 5

Brigham has a strong balance sheet and lots of liquidity. I do expect them to announce an aggressive acquisition program for 2021.

There is a lot of upside to my valuation of $16.70 because none of their production is hedged and I expect commodity prices to exceed what I'm using in my forecasts. Plus, since they have not provided any guidance for 2021, my forecast is based on only 10% YOY production growth this year.

All three of the minerals companies in our High Yield Portfolio (BSM, MNRL and VNOM) pay variable quarterly dividends that are a high percentage of their cash flow from operations. There is a good chance that they all double or triple their dividends from 2020 to 2021. Again, none of Brigham's production is hedged, so they do have the most exposure to rising oil, gas and NGL prices.

BSM is an MLP and more heavily weighted to natural gas
MNRL and VNRL have elected to be taxed as C-Corps., so they are suitable for IRA accounts.

Recent Analyst price targets:
$20.00 < Stifel 1/26/2021
$18.00 < RBC Cap 12/17/2020
$12.00 < Piper Sandler 12/4/2020
$15.00 < Raymond James 11/12/2020