Sitio Royalties (STR) New Presentation - May 23

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Sitio Royalties (STR) New Presentation - May 23

Post by dan_s »

If you are building a portfolio primarily for dividend income in your old age (like I am) then you should take a hard look at Sitio Royalties, one of four minerals companies in our High Yield Income portfolio.

Here is the link to their updated presentation.
https://s201.q4cdn.com/966197541/files/doc_presentations/2023/May/23/05-23-23-sitio-investor-presentation-vff.pdf

STR closed yesterday at $26.30. My current valuation is $32.00 and TipRanks consensus price target is $31.00.
It paid total dividends of $2.75 in 2022. Their dividends are variable; ~65% of their free cash flow.
For Q1 2023 they paid a dividend of $0.50/share.
Based on my forecast model, full year 2023 dividends should be ~$1.97.

In addition to nice dividends, STR is an Aggressive Growth company. Production increased 245% in 2022 and based on the midpoint of their guidance, production should increase another 132% in 2023. That's even if they don't make another large acquisition, which I believe they will.

Q1 production mix was 51.3% crude oil, 19.5% NGLs and 29.2% natural gas.
Realized prices net of cash settlements on hedges were $77.14/BO, $21.75/Bngls and $2.90/mcf for ngas.
Dan Steffens
Energy Prospectus Group
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