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Cardinal Energy Ltd (CJ-T) is facing significant challenges as reflected in the expert reviews. While the Energy Index has shown a 20% increase Year-To-Date, sentiment around small- to mid-cap stocks like Cardinal remains weak, with larger companies attracting more investment. The reviews express concerns about the sustainability of its dividend, as the company is currently overspending its free cash flow and relying on debt to maintain dividend payments. Experts highlight that, while the yield is appealing, it may not be justifiable considering the potential instability with falling oil prices. As a consequence, they suggest investors explore more viable alternatives, particularly those offering sustainable dividends, despite minor sacrifices in yield.
Outspending free cashflow, using debt to finance dividend, not his preference. Gets concerning if oil price drops. Not sustainable for the next year and a half. In 2026, the cadence of capex reduces and the dividend becomes sustainable. Yield is 10.1%.
Look elsewhere. You may sacrifice 2% on the dividend, but you're getting one that's much more sustainable.
For the mid-cap Canadian companies in the space with higher yields, be very careful. If you're looking for dividend sustainability, we've gone through a couple of cycles in the last decade -- dividends have been both increased and reduced. Yield is 11%.
In the space, he prefers FRU.
He never buys a company on the expectation that it will be bought out. Good exposure to medium-heavy oil. Very manageable debt levels. Older, higher-cost assets, so it needs a higher than average oil price. If you don't care about capital appreciation and just want the juicy dividend, it's not the worst name.
CJ is always going to be cyclical, but it has a very strong balance sheet and good cash flow. Dividend payout ratio is less than 30%, but cash flow can change quickly if commodity prices drop. But we see no real problem with the dividend, but it is of course not guaranteed, and with 10%+ yield investors do seem concerned. While we are not overly worried, we would not use the word 'safe' for the dividend of any oil and gas stock. Cash flow and earnings will drop this year on lower pricing. The stock is cheap, but with little growth expected we would rate it a HOLD and not a BUY.
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EPS of 10c missed estimates of 15.3c. Revenue of $135M missed estimates of $136.6M. Production was 21.7K b/d day and free cash flow was $28.8M. Its 2023 drill program will renew in the 2Q. Production rose 5%. The balance sheet is now nearly debt free. Earnings are expected to fall this year. The stock is very cheap, but RBC seems to be taking a conservative stance in case prices fall in a recession. We think the 7X valuation already reflects most risk. Payout ratio is <25%, though at an 11% yield investors seem unduly concerned on the dividend.
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Cardinal Energy Ltd is a Canadian stock, trading under the symbol CJ-T on the Toronto Stock Exchange (CJ-CT). It is usually referred to as TSX:CJ or CJ-T
In the last year, 2 stock analysts published opinions about CJ-T. 0 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Cardinal Energy Ltd.
Cardinal Energy Ltd was recommended as a Top Pick by on . Read the latest stock experts ratings for Cardinal Energy Ltd.
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.
2 stock analysts on Stockchase covered Cardinal Energy Ltd In the last year. It is a trending stock that is worth watching.
On 2025-04-15, Cardinal Energy Ltd (CJ-T) stock closed at a price of $5.42.
Sentiment remains challenged in the space (a common theme today), even though the Energy Index is up about 20% YTD. People are hiding in large caps, with few funds coming to small- or mid-caps. Hard to see it outperforming. Yield is 10.7%, pretty hard to replace. Not a name for new money.
Look at his Top Picks today, and then decide if you want to let this go for tax-loss selling.