Ryan Bushell Topaz Energy TPZ-T HOLD Jul 29, 2024

Likes prospects of company. Spinout from Tourmaline Oil & Gas. Very attractive valuation given current share price. Not much debt on the balance sheet. Lots of room to grow. 6% dividend yield and good management team.

The company was spun off from Tourmaline. Its royalties come mostly from oil but some come from gas too which has brought the stock price down. A good time to buy now that it is below $20. Receives royalties from Tourmaline.

Performed quite well, good yield, management seems quite strong. A promising and strong space. Good one to consider if you want income from the oil/gas space.

Excellent company with high quality management.
Current share price a good place to buy.
Continues to rise revenues.
Royalties on excellent acreage.
Expects dividend to grow.

TPZ is forecasted to double it's EPS in 2024 while seeing revenue growth of 4%. TPZ's recent quarterly earnings displayed solid growth while the company continues to be heavily tied to commodity pricing. We think TPZ is fine to hold for income as it pays a good dividend yield at 6.6%, but the payout ratio is quite high compared with the sector.  The outlook and strong recent quarter display positively for short-term growth, but we think that there are better options for long-term potential. TPZ is also trading at a very expensive valuation versus other peer companies. 
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Half of its portfolio is royalties from infrastructure and the other half is royalties from the best companies and best plays in Canada. It owns the land associated with these royalties. It has high free cash flow and pays a high dividend of 6% giving it stability. It should trade around $30. The energy sector is finally lifting but needs more stability in oil prices. He feels the price can stay in the $75 to $80 range for the longer term.
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We like TPZ for an income play as it pays a good dividend yield of 5.4%, generates good free cash flow, and does not have too much debt. Its balance sheet is strong, forward sales and earnings estimates point towards high growth rates, and overall we would be comfortable with this name for a long-term dividend name, although, it has seen a nice run recently, and we would expect a period of consolidation.
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Hasn't looked at it in a long time.