Civitas Resources (CIVI) Valuation Update - Mar 2

[dan_s]

CIVI closed at $70.81 on March 1st. It is one of my Top Picks in our High Yield Income Portfolio.

The Company's Q4 2023 results beat my forecast, with production of 278,788 Boepd.
They closed the Vencer Energy acquisition on January 2nd, which increased production to 330,000 Boepd.
They expect to exit this year with production over 340,000 Boepd (48% oil, 24% NGLs and 28% natural gas)
2024 free cash flow should be ~$1.1 billion based on my forecast.
My valuation increases by $4 to $108 per share. < My updated forecast model has been posted to the EPG website.

The Company's Board of Directors approved a quarterly dividend of $1.45 per share, payable on March 28, 2024 to shareholders of record as of March 15, 2024. The amount reflects the combination of the base dividend of $0.50 per share and a variable dividend of $0.95 per share. Additional details regarding the calculation of the variable dividend can be found in the Company's latest investor presentation located on its website.

Including the dividend to be paid on March 28, I expect their total 2024 dividends to be $7.60. < Annualized yield of 10.3%

This is a classic "Growth + Income" stock.