TSX:PEY

Stock Analysis Report

Peyto Exploration & Development

Executive Summary

Peyto Exploration & Development Corp., an energy company, engages in the exploration, development, and production of oil and natural gas, and natural gas liquids in Deep Basin, Alberta.

Rewards

Trading at 36.9% below its fair value

Revenue is forecast to grow 10.02% per year

Risk Analysis

Earnings are forecast to decline by an average of -135.3% per year for the next 3 years

Interest payments are not well covered by earnings

Unstable dividend track record

Significant insider selling over the past 3 months



Snowflake Analysis

Undervalued average dividend payer.

Share Price & News

How has Peyto Exploration & Development's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PEY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-8.6%

PEY

-0.5%

CA Oil and Gas

0.8%

CA Market


1 Year Return

-52.3%

PEY

5.5%

CA Oil and Gas

10.6%

CA Market

Return vs Industry: PEY underperformed the Canadian Oil and Gas industry which returned 5.3% over the past year.

Return vs Market: PEY underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

PEYIndustryMarket
7 Day-8.6%-0.5%0.8%
30 Day-15.1%-0.3%2.1%
90 Day7.7%9.5%6.6%
1 Year-49.5%-52.3%10.1%5.5%14.1%10.6%
3 Year-86.9%-89.1%-8.2%-17.8%17.0%6.4%
5 Year-86.9%-90.0%-3.6%-19.0%38.5%18.2%

Price Volatility Vs. Market

How volatile is Peyto Exploration & Development's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Peyto Exploration & Development undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PEY (CA$3.53) is trading below our estimate of fair value (CA$5.59)

Significantly Below Fair Value: PEY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PEY is good value based on its PE Ratio (3.8x) compared to the Oil and Gas industry average (11.8x).

PE vs Market: PEY is good value based on its PE Ratio (3.8x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: PEY's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: PEY is good value based on its PB Ratio (0.3x) compared to the CA Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Peyto Exploration & Development forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-135.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PEY's earnings are forecast to decline over the next 3 years (-135.3% per year).

Earnings vs Market: PEY's earnings are forecast to decline over the next 3 years (-135.3% per year).

High Growth Earnings: PEY's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PEY's revenue (10% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: PEY's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PEY's Return on Equity is forecast to be low in 3 years time (2.5%).


Next Steps

Past Performance

How has Peyto Exploration & Development performed over the past 5 years?

-8.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PEY has high quality earnings.

Growing Profit Margin: PEY's current net profit margins (33.6%) are higher than last year (30.8%).


Past Earnings Growth Analysis

Earnings Trend: PEY's earnings have declined by -8.1% per year over the past 5 years.

Accelerating Growth: PEY's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PEY had negative earnings growth (-4.9%) over the past year, making it difficult to compare to the Oil and Gas industry average (16.5%).


Return on Equity

High ROE: PEY's Return on Equity (8.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Peyto Exploration & Development's financial position?


Financial Position Analysis

Short Term Liabilities: PEY's short term assets (CA$62.7M) do not cover its short term liabilities (CA$72.3M).

Long Term Liabilities: PEY's short term assets (CA$62.7M) do not cover its long term liabilities (CA$1.8B).


Debt to Equity History and Analysis

Debt Level: PEY's debt to equity ratio (65.9%) is considered high.

Reducing Debt: PEY's debt to equity ratio has increased from 61.7% to 65.9% over the past 5 years.

Debt Coverage: PEY's debt is well covered by operating cash flow (30.4%).

Interest Coverage: PEY's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

Inventory Level: PEY has a high level of physical assets or inventory.

Debt Coverage by Assets: PEY's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Peyto Exploration & Development's current dividend yield, its reliability and sustainability?

7.50%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Peyto Exploration & Development before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company7.5%marketbottom25%1.9%markettop25%5.5%industryaverage4.6%forecastin3Years7.5%

Current dividend yield vs market & industry

Notable Dividend: PEY's dividend (6.8%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: PEY's dividend (6.8%) is in the top 25% of dividend payers in the Canadian market (5.48%)


Stability and Growth of Payments

Stable Dividend: PEY has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: PEY has only been paying a dividend for 9 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.2%), PEY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PEY's dividends in 3 years are forecast to be covered by earnings (57.3% payout ratio).


Next Steps

Management

What is the CEO of Peyto Exploration & Development's salary, the management and board of directors tenure and is there insider trading?

8.6yrs

Average management tenure


CEO

Darren Gee (51yo)

13yrs

Tenure

CA$2,247,650

Compensation

Mr. Darren Gee has been the Chief Executive Officer of Peyto Exploration & Development Corp since January 1, 2007 and has been its President since August 2006. Mr. Gee served as Chief Executive Officer and ...


CEO Compensation Analysis

Compensation vs Market: Darren's total compensation ($USD1.72M) is above average for companies of similar size in the Canadian market ($USD1.00M).

Compensation vs Earnings: Darren's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.6yrs

Average Tenure

52yo

Average Age

Experienced Management: PEY's management team is seasoned and experienced (8.6 years average tenure).


Board Age and Tenure

11.0yrs

Average Tenure

53yo

Average Age

Experienced Board: PEY's board of directors are seasoned and experienced ( 11 years average tenure).


Insider Trading

Insider Buying: PEY insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

BuyCA$83,00021 Jan 20
John Rossall
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,000
Max PriceCA$3.32
BuyCA$91,78014 Jan 20
John Rossall
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares26,000
Max PriceCA$3.53
BuyCA$35,40010 Jan 20
Scott Robinson
EntityIndividual
Shares10,000
Max PriceCA$3.54
SellCA$183,43919 Dec 19
Lee Curran
EntityIndividual
Role
Other Key Executive
Vice President of Drilling & Completions
Shares49,015
Max PriceCA$3.74
BuyCA$51,66017 Dec 19
John Rossall
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares14,000
Max PriceCA$3.69
SellCA$53,85016 Dec 19
Kathy Turgeon
EntityIndividual
Role
Member of the Board of Directors
VP of Finance
Shares15,000
Max PriceCA$3.59
SellCA$89,50016 Dec 19
Lee Curran
EntityIndividual
Role
Other Key Executive
Vice President of Drilling & Completions
Shares25,000
Max PriceCA$3.58
SellCA$22,79009 Oct 19
Todd Burdick
EntityIndividual
Role
Other Key Executive
Vice President of Production
Shares8,600
Max PriceCA$2.65
SellCA$40,32716 Aug 19
Darren Gee
EntityIndividual
Role
Chief Executive Officer
president
Shares12,590
Max PriceCA$3.21
BuyCA$66,98026 Jun 19
Michael MacBean
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares17,000
Max PriceCA$3.94
SellCA$66,98026 Jun 19
Michael MacBean
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares17,000
Max PriceCA$3.94
SellCA$195,10014 Jun 19
Stephen Chetner
EntityIndividual
Role
Secretary
Corporate Secretary
Shares50,000
Max PriceCA$3.90
BuyCA$102,40028 May 19
John Rossall
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceCA$5.12
BuyCA$64,40005 Apr 19
Kathy Turgeon
EntityIndividual
Role
Member of the Board of Directors
VP of Finance
Shares10,000
Max PriceCA$6.44
BuyCA$65,20822 Mar 19
Jean-Paul Lachance
EntityIndividual
Role
Chief Operating Officer
VP of Engineering & COO
Shares8,800
Max PriceCA$7.41

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Steve Chetner (52yo)

    Corporate Secretary

    • Tenure: 20yrs
    • Compensation: CA$120.10k
  • Darren Gee (51yo)

    president

    • Tenure: 13yrs
    • Compensation: CA$2.25m
  • JP Lachance

    VP of Engineering & COO

    • Tenure: 1.9yrs
    • Compensation: CA$1.53m
  • Kathy Turgeon (57yo)

    VP of Finance

    • Tenure: 1.7yrs
    • Compensation: CA$1.12m
  • David Thomas

    Vice President of Exploration

    • Tenure: 9.2yrs
    • Compensation: CA$1.57m
  • Tim Louie

    Vice President of Land

    • Tenure: 8yrs
    • Compensation: CA$842.73k
  • Lee Curran

    Vice President of Drilling & Completions

    • Tenure: 5yrs
    • Compensation: CA$1.26m
  • Todd Burdick

    Vice President of Production

    • Tenure: 5yrs
    • Compensation: CA$1.03m
  • Lydia Hamaliuk

    Manager of Human Resources


    Board Members

    • Greg Fletcher (71yo)

      Independent Director

      • Tenure: 13yrs
      • Compensation: CA$98.15k
    • Don Gray (53yo)

      Independent Chairman of the Board

      • Tenure: 10.7yrs
      • Compensation: CA$135.90k
    • Darren Gee (51yo)

      president

      • Tenure: 13yrs
      • Compensation: CA$2.25m
    • Mick MacBean (51yo)

      Lead Independent Director

      • Tenure: 11yrs
      • Compensation: CA$105.70k
    • John Rossall (58yo)

      Independent Director

      • Tenure: 0.7yrs
    • Kathy Turgeon (57yo)

      VP of Finance

      • Tenure: 1.7yrs
      • Compensation: CA$1.12m
    • Brian Davis (53yo)

      Independent Director

      • Tenure: 13.4yrs
      • Compensation: CA$98.15k

    Company Information

    Peyto Exploration & Development Corp.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Peyto Exploration & Development Corp.
    • Ticker: PEY
    • Exchange: TSX
    • Founded: 1997
    • Industry: Oil and Gas Exploration and Production
    • Sector: Energy
    • Market Cap: CA$527.597m
    • Shares outstanding: 164.87m
    • Website: https://www.peyto.com

    Number of Employees


    Location

    • Peyto Exploration & Development Corp.
    • 600 – 3rd Avenue SW
    • Suite 300
    • Calgary
    • Alberta
    • T2P 0G5
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PEYTSX (The Toronto Stock Exchange)YesCommon SharesCACADAug 2006
    PXKDB (Deutsche Boerse AG)YesCommon SharesDEEURAug 2006
    PEYU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDAug 2006
    PXKBST (Boerse-Stuttgart)YesCommon SharesDEEURAug 2006
    0VCOLSE (London Stock Exchange)YesCommon SharesGBCADAug 2006

    Biography

    Peyto Exploration & Development Corp., an energy company, engages in the exploration, development, and production of oil and natural gas, and natural gas liquids in Deep Basin, Alberta. As of December 31, 2018, it had a total proved plus probable reserves of 803 million barrels of oil equivalent. The company was formerly known as Peyto Energy Trust and changed its name to Peyto Exploration & Development Corp. in January 2011. Peyto Exploration & Development Corp. was incorporated in 1997 and is headquartered in Calgary, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 00:38
    End of Day Share Price2020/01/22 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.