RE:RE:PEY and FRU Have Exactly The Same Market Cap at 2.56BDifferent business model indeed.
Peyto BOD had different options before increasing dividends from $100m/y to $225m/y.
1 - Reduce debt
2 - Normal Course Issuer Bid
3 - Increase Capex.
Increasing dividends was probably the worse decision.
Using the extra cash flows to reduce debt and buying back shares would have been the optimal option. Not very often does a public company have the combination of big cash flows AND low stock price. Yet they do not hesitate to print some more shares to pay their bonus.
Also, they have a tendency to over sell their production with their hedge book. Funds looking to have an exposure to Natural gas will look somewhere else.
Since Peyto's BOD seem very confortable with these decisions, it is very unlikely they will improve on these issues.
The result is PEY will always trade at a discount VS its peers because of these poor decisions.