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 47.3% below its fair value

Revenue is forecast to grow 12.25% 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

Highly volatile share price over 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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.5%

PEY

0.2%

CA Oil and Gas

0.3%

CA Market


1 Year Return

-64.4%

PEY

-0.1%

CA Oil and Gas

5.5%

CA Market

Return vs Industry: PEY underperformed the Canadian Oil and Gas industry which returned 0.2% over the past year.

Return vs Market: PEY underperformed the Canadian Market which returned 5.8% over the past year.


Shareholder returns

PEYIndustryMarket
7 Day-1.5%0.2%0.3%
30 Day-20.6%-2.3%0.5%
90 Day-3.2%4.0%3.5%
1 Year-62.2%-64.4%4.2%-0.1%8.8%5.5%
3 Year-88.5%-90.5%-7.5%-17.3%14.8%4.5%
5 Year-89.8%-92.3%-9.3%-23.8%34.1%14.5%

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?

47.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PEY (CA$2.7) is trading below our estimate of fair value (CA$5.12)

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 (2.9x) compared to the Oil and Gas industry average (11x).

PE vs Market: PEY is good value based on its PE Ratio (2.9x) compared to the Canadian market (15.9x).


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 (0.7x).


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 (12.3% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: PEY's revenue (12.3% 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 (0.6%).


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 (6%).


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?

8.89%

Current Dividend Yield


Upcoming Dividend Payment

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


Dividend Yield vs Market

company8.9%marketbottom25%1.9%markettop25%5.3%industryaverage4.8%forecastin3Years8.9%

Current dividend yield vs market & industry

Notable Dividend: PEY's dividend (8.89%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: PEY's dividend (8.89%) is in the top 25% of dividend payers in the Canadian market (5.32%)


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 well covered by earnings (43.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.7yrs

Average management tenure


CEO

Darren Gee (51yo)

13.1yrs

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 ($USD1.70M) is above average for companies of similar size in the Canadian market ($USD963.71K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Darren Gee
president13.1yrsCA$2.25m1.21% CA$5.4m
Kathy Turgeon
VP of Finance1.8yrsCA$1.12m0.052% CA$231.1k
Jean-Paul Lachance
VP of Engineering & COO2yrsCA$1.53m0.067% CA$299.1k
David Thomas
Vice President of Exploration9.3yrsCA$1.57m0.15% CA$685.5k
Stephen Chetner
Corporate Secretary20.1yrsCA$120.10k0.28% CA$1.3m
Timothy Louie
Vice President of Land8.1yrsCA$842.73k0.034% CA$152.2k
Lee Curran
Vice President of Drilling & Completions5.1yrsCA$1.26m0.061% CA$270.0k
Todd Burdick
Vice President of Production5.1yrsCA$1.03m0.018% CA$80.4k
Lydia Hamaliuk
Manager of Human Resources0yrsno datano data

8.7yrs

Average Tenure

52yo

Average Age

Experienced Management: PEY's management team is seasoned and experienced (8.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Darren Gee
president13.1yrsCA$2.25m1.21% CA$5.4m
Kathy Turgeon
VP of Finance1.8yrsCA$1.12m0.052% CA$231.1k
Gregory Fletcher
Independent Director13.1yrsCA$98.15k0.012% CA$51.3k
Donald Gray
Independent Chairman of the Board10.8yrsCA$135.90k0.58% CA$2.6m
Michael MacBean
Lead Independent Director11.1yrsCA$105.70k0.066% CA$293.0k
John Rossall
Independent Director0.8yrsno data0.058% CA$256.5k
Brian Davis
Independent Director13.5yrsCA$98.15k0.088% CA$393.2k

11.1yrs

Average Tenure

53yo

Average Age

Experienced Board: PEY's board of directors are seasoned and experienced ( 11.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$445.160m
  • 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 Analysis2020/02/18 00:35
End of Day Share Price2020/02/14 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.