Sitio Royalties (STR) Valuation Update - Aug 21
Posted: Sun Aug 21, 2022 2:54 pm
STR closed on August 19 at $27.80 per share.
It is a recent addition to our High Yield Income Portfolio. It is a C-Corp.
My updated valuation is $33.50. Since it is a new addition, I have tried to be "conservative" in my model assumptions. If Q3 results confirm my model assumptions, it should deserve a higher valuation multiple.
The Company's most recent dividend was $0.71 for Q2 and my forecast is that total dividends for 2022 will be $2.98 for annualize yield of 10.7%.
The Company was created by the merger of Desert Peak Minerals (a private company) into publicly traded Falcon Minerals that close on June 7, 2022. In reality Desert Peak used the transaction to “go public” and their equity holders end up owning ~73% of newly named Sitio Royalties Corp. (STR).
> The combined company will be managed by the Desert Peak team and the Company’s headquarters moved to Denver, Colorado.
> In addition to the merger, the Company closed two accretive acquisitions in the Permian Basin in June and July.
TipRanks: "In the last 3 months, 4 ranked analysts set 12-month price targets for STR. The average price target among the analysts is $36.25. The four price targets range from $32 to $43 (by RBC Capital on 8/15/2022)."
It is a recent addition to our High Yield Income Portfolio. It is a C-Corp.
My updated valuation is $33.50. Since it is a new addition, I have tried to be "conservative" in my model assumptions. If Q3 results confirm my model assumptions, it should deserve a higher valuation multiple.
The Company's most recent dividend was $0.71 for Q2 and my forecast is that total dividends for 2022 will be $2.98 for annualize yield of 10.7%.
The Company was created by the merger of Desert Peak Minerals (a private company) into publicly traded Falcon Minerals that close on June 7, 2022. In reality Desert Peak used the transaction to “go public” and their equity holders end up owning ~73% of newly named Sitio Royalties Corp. (STR).
> The combined company will be managed by the Desert Peak team and the Company’s headquarters moved to Denver, Colorado.
> In addition to the merger, the Company closed two accretive acquisitions in the Permian Basin in June and July.
TipRanks: "In the last 3 months, 4 ranked analysts set 12-month price targets for STR. The average price target among the analysts is $36.25. The four price targets range from $32 to $43 (by RBC Capital on 8/15/2022)."