Opinions Mason Granger
PrairieSky RoyaltyPSK.TOTOP PICKApr 02, 2015
Mason GrangerStock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Exceptionally well run. All-time high today. His struggle has always been what's the fair multiple on a royalty company? Trades at 19.5x PE, 18x for next year, and FCF yield is 5% (not compelling). Yield is 3%.
He owns some in his income fund. If you're really bullish on oil, royalty is not the way to go.
Eric NuttallStrong performer over past several years, so trades at fairly high multiple (for example, twice that of FRU earlier this year). Extraordinarily good exposure to the Clearwater, good job with its business model. He struggles with what a fair multiple is. About 10% upside from here, and that doesn't do it for him. Yield is 3.8%, not overly compelling.
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Premium contentOur PAST TOP PICK with PSK has triggered its stop at $23. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 27%, when combined with our previous recommendations.
FRU is such a low-cost producer, it hasn't benefited as much as marginal producers have in the uptick in oil/gas prices. So its margins haven't increased as much. FRU asset package is so good, he's happy to own it despite this year's price action. He likes both names.
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The secondary issue where Encana (ECA-T) sold the rest of their stake was done a $36.50, so this is an opportunity to pick the company up at a discount. He likes some of the attributes of this company. Dividend yield of 4.13% is very safe and sustainable. The company has no debt and a positive working capital. Have an undrawn $100 million credit facility. Likes the business model which is based around the fee simple lands, or the mineral rights that Encana used to own. They have 5.3 million acres of mineral rights plus gross overriding royalties on 3.6 million acres. Trades at a very high valuation multiple at about 26X enterprise value to adjusted cash flow, but it has a cost of capital to go to do additional acquisitions of these types of royalty interests.