Would you initiate an investment of BIR at the current share price? Is its dividend safe? How would you rank BIR against two other small high yield O&G companies - PHX and CJ in terms of likely combined return over the next two years?
BIR pays a yield of 8.9%, has low debt levels relative to EBITDA, and it has mostly been using its free cash flows to pay dividends, repurchase shares, and pay down debt. Its equity position is strong, but it currently has no cash.
Relative to PHX and CJ, BIR is the larger of the three names and has demonstrated the best profit margin expansion over the past five years. PHX has seen the best share price performance of the three names and also has the lowest valuation. Given PHX's strong share price performance and lower valuation, we would rank our expectations for future performance (from highest to lowest) as follows: PHX, BIR, and CJ. (5iResearch)