Coterra Energy (CTRA) Update - April 13

[dan_s]

Coterra Energy is one of the "gassers" in our Sweet 16, that I will probably move to our High Yield Income Portfolio because it now pays a very attractive "variable dividend" and it says it is focused on just maintaining production growth at low single digits.
The Company was created by the merger of Cimarex and Cabot that closed 10/1/2021

TipRanks note this morning 4/13/2022:

"JPMorgan analyst Arun Jayaram raised the price target on Coterra Energy (NYSE: CTRA) to $37.00 (from $26.00) while maintaining a Neutral rating."

"On 4/8/2022 Mizuho analyst Vincent Lovaglio raised the firm's price target on Coterra Energy to $44 from $38 and keeps a Buy rating on the shares. The analyst increased his long-term natural gas price forecast to $3.65/mcf from $3.30/mcf to reflect a greater expected call on U.S. natural gas exports as Europe seeks to displace Russian gas imports. He believes the U.S. will need to support 2bcfd or more annual export growth longer-term, "with persistently high global gas prices providing an opportunity for gas producers able to take on international price exposure."

CTRA was trading at $29.06 at the time of this post; up 53% YTD.

Using my new ngas price deck, my valuation increases by $6 to $38/share. They have less than 25% of this year's natural gas hedged, so it will be getting a nice revenue boost. They also produce a lot of unhedged NGLs.

If you want more exposure to natural gas prices and you like getting nice quarterly dividends, check out CTRA.
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On November 3, 2021, Coterra's board approved the previously announced 14 percent increase to its annual base common stock dividend to $0.50 per share and an acceleration of its first variable dividend by one quarter. The approved base plus variable quarterly dividend equals $0.30 per share ($0.125 base, $0.175 variable), based on combined legacy Cabot and Cimarex free cash flow for third-quarter 2021, and will be paid on November 24, 2021 to holders of record on November 15, 2021.

On October 4, 2021, Coterra's board declared a special cash dividend of $0.50 per share; paid to shareholders on October 22, 2021.

Per my forecast, Coterra's "base + variable" dividends will be going much higher this year.