Sitio Royalties (STR) Update - Sept 11

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

Sitio Royalties (STR) Update - Sept 11

Post by dan_s »

I just posted my updated profile on Sitio Royalities Corp. to the EPG website. It is one of four minerals companies in our High Yield Income Portfolio.

STR is a "Growth + Income Stock". If you think oil prices are going higher (like I do) then STR should be a good fit for your portfolio. It pays variable dividends that are ~35% of their operating cash flow. Based on Q2 results they paid out $0.40/share. I expect their dividends for Q3 and Q4 to be $0.45 to $0.60 per share. It also trades at a discount to my stock valuation.

All of the minerals companies' share prices should move in lockstep with the prices of the commodities that they produce. STR's production mix is approximately 50% crude oil, 30% natural gas and 20% NGLs.

For more exposure to oil prices, I recommend Viper Energy Partners (VNOM). Viper is taxed as a C-Corp. You can find our recent profile on Viper under the High Yield tab on the EPG website.

We will be publishing updated profiles on BSM and KRP within a few days.

Black Stone Minerals LP (BSM) is an MLP. It currently has the highest dividend yield in our High Yield Income Portfolio (~10.8%). It is more heavily weighted to natural gas than the other three, but it has some very good hedges that insulate it from lower ngas prices for the next few quarters.

Kimbell Royalty Partners (KRP) has a balanced production mix. KRP has elected to be taxed as a C-Corp. (so no K-1). Annualized dividend yield is ~9.7%.
Dan Steffens
Energy Prospectus Group
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