RE:RBC Initiates overage with $3.50 PT - Globe and Mail"RBC Capital has initiated coverage on Cardinal Energy with a Sector Perform rating and $3.50 TP, saying management's efforts to improve operating costs and reduce decommissioning obligations will pay off down the road. At the moment though, RBC prefers to stay on the sidelines.
Cardinal operates a mix of mature light and medium oil-weighted assets across Alberta and South East Saskatchewan. RBC forecasts Cardinal will generate a 2020 FCF yield of 26% at RBC's base outlook, which compares to the peer group average of 11%.
The analyst estimates Cardinal can cover a $40-50 million maintenance program in 2020 at US$46/bbl and maintain the current dividend payout down US$50/bbl. The company has an effective payout ratio of 54% in 2020, well below peers at 86%."
Isn't incredible or crazy that they are sticking to a neutral rating vs outperform while this company has a FCF yield of 26% vs peers at 11%?
If over double the yield isn't sufficient to call this an outperform or a stock due to catch others who are not even growing by the way then what is?
Then payout ratio of 54% vs 86%? I mean this analyst is highly illogical unless they want to accumulate...