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Investor Insights

This summary was created by AI, based on 10 opinions in the last 12 months.

The reviews provide a mixed outlook on Birchcliff Energy Ltd. Some experts highlight the positive energy outlook and strong balance sheet, while others express concerns about high debt levels and potential dividend cuts if natural gas prices do not increase. The company's recent financial performance has been somewhat disappointing, with missed estimates and declining production. Overall, the experts seem divided on the stock's prospects, with some emphasizing potential for growth in the long term and others cautioning about current challenges.

Consensus
Mixed
Valuation
Fair Value
DON'T BUY
Dividend sustainable?

Owning a company that's more cyclical is not owned for the dividend yield. You can find 6-7% dividend yields on companies that aren't as volatile. This one is fine, but tied to underlying commodity prices. The group hasn't performed exceptionally well.

If he's correct, dividend was cut in half earlier this year, now yielding about 6.5%. On the high end for the industry, as capex takes a lot funding. Once cut, he assumes they won't cut again, at least not right away.

oil / gas
DON'T BUY

He's been buying other small nat gas names. Cut dividend, a good thing because they were using debt to fund it. Next year, payout ratio should drop to 73% with $4 gas, a lot more defendable. Concerns about debt, takeaway capacity, and CEO succession. Cleaner names elsewhere. Yield is 6.7%.

oil / gas
WEAK BUY
For a TFSA

Good for TFSA. The company is on solid footing with the energy outlook positive for 2-3 years. Oil prices today are higher than last year's expectations. Also, we haven't seen the oil exploration which is normal for this part of the cycle. Be careful, given the emergence of EVs which is a long-term trend, though term there are question marks.

oil / gas
RISKY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

As part of Birchliff's orderly and planned leadership succession process, Jeff Tonken retired as CEO effective December 31, 2023, and Chris Carlsen is now the President and CEO. BIR has $244M in net debt, representing a small 0.9X net debt/EBITDA ratio and 0.15 debt/equity ratio. A rough estimation of ~$55M in quarterly cash from operations and ~$50M in CAPEX, along with ~$55M in quarterly dividends, equates to approximately $50M of debt issued each quarter to service its current dividend. It is tough to gauge exactly what the company might do if gas prices remain at these levels, but we feel the company is less likely to cut the dividend than it is to issue debt or equity to fund the dividends. At its currently low debt levels, we believe the company will likely continue increasing its debt to fund its yield.
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oil / gas
DON'T BUY

His numbers show burning $25M of debt to satisfy dividend next year. US nat gas supply's at all-time high. Won't cut dividend, unless gas price goes down materially due to a warm winter. Strong balance sheet. Trades at a premium. 13% downside from here. Yields almost 12%.

oil / gas
WEAK BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Negative momentum would be the main issue holding us back right now. It is down 18% in November alone, and with the 3Q 'miss' and the big negative shift in the energy sector, it is hard to step in aggressively without at least some stabilization. BIR is down 34% this year, and could also still see a bit more tax loss selling. A shift in momentum is never easy to time perfectly, but in this case we would be more willing to pay a bit more if the stock price can at least stabilize for a period of time. Without this, we would be OK with a slow beginning accumulation of stock if it moves close to the low $6 level.
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oil / gas
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

The update was slightly negative as free cash flow missed estimates. Earnings did as well. Spending was 'slightly higher' which also added to debt. EPS was 6c vs 9c expected. Cash flow was $71.4M vs estimates $85.6M. Production fell 5% to 74,143 b/d. Per share cash flow was 27c vs $1.01 last year. Capex was $67.5M. Production was in line with estimates. 12-month payout ratio is still below 50% on operating cash flow. Consider strong growth is still expected in 2024, the stock's decline seems a bit harsh to us. The balance sheet also remains in excellent shape. 
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oil / gas
BUY ON WEAKNESS

Very high dividend yield has been a concern given natural gas prices. Expecting dividend to remain where it is. Better names to buy in sector. Expecting ~$8 share price. 

oil / gas
DON'T BUY

If natural gas price doesn't go up, they'll have to cut the dividend. They, and others, were too optimistic on the commodity price when setting the base dividend. Trades at 5x $80 oil. Natural gas is tough.

oil / gas
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

Thedividend is guaranteed, but considering a) current prices and outlook b) a very strong balance sheet; c) payout ratio and d) the fact that it was only just increased in January, it is not a dividend we would be overly concerned with.
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oil / gas
BUY

Decline in earnings forecast. Doesn't think dividend will be cut. Balance sheet is very strong. Even with short-term pressure, dividend doesn't need to be cut. Likes energy stocks.

oil / gas
PAST TOP PICK
(A Top Pick Apr 04/22, Down 0.5%)

The oil and gas sector has been under-invested for a long time so there is good upside in the long term. It has a good balance sheet, nice dividend, good revenue and value. The downside is limited.

oil / gas
TOP PICK

Very cheap. Huge upside potential. CEO says he'll cut capex before he'll cut the dividend. Lovely yield of 9.26%.

(Analysts’ price target is $12.17)
oil / gas
DON'T BUY

Not a great company to own at current share price.
Good time to sell shares.
Currently not covering dividend with strip price
Will have to take on debt.
Better names to own in sector.

oil / gas
COMMENT
Rotate between BIR and MEG?

Makes sense. MEG is a pure oil play with long-life reserves, and BIR is more levered to natural gas. You're adding a new level of risk to switch back and forth. The risk is you do it at the wrong time and end up losing. The volatility is beautiful on the upside, but kills you on the downside. Instead, buy ARX with decent nat gas, and a light oil play since they bought Seven Generations, and production growth. Then you don't have to make the decisions about moving back and forth. 

oil / gas
Showing 1 to 15 of 187 entries

Birchcliff Energy Ltd.(BIR-T) Rating

Ranking : 4 out of 5

Bullish - Buy Signals / Votes : 5

Neutral - Hold Signals / Votes : 2

Bearish - Sell Signals / Votes : 4

Total Signals / Votes : 11

Stockchase rating for Birchcliff Energy Ltd. is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Birchcliff Energy Ltd.(BIR-T) Frequently Asked Questions

What is Birchcliff Energy Ltd. stock symbol?

Birchcliff Energy Ltd. is a Canadian stock, trading under the symbol BIR-T on the Toronto Stock Exchange (BIR-CT). It is usually referred to as TSX:BIR or BIR-T

Is Birchcliff Energy Ltd. a buy or a sell?

In the last year, 11 stock analysts published opinions about BIR-T. 5 analysts recommended to BUY the stock. 4 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Birchcliff Energy Ltd..

Is Birchcliff Energy Ltd. a good investment or a top pick?

Birchcliff Energy Ltd. was recommended as a Top Pick by on . Read the latest stock experts ratings for Birchcliff Energy Ltd..

Why is Birchcliff Energy Ltd. stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Birchcliff Energy Ltd. worth watching?

11 stock analysts on Stockchase covered Birchcliff Energy Ltd. In the last year. It is a trending stock that is worth watching.

What is Birchcliff Energy Ltd. stock price?

On 2024-06-20, Birchcliff Energy Ltd. (BIR-T) stock closed at a price of $6.05.