Q: With gas prices being low like they are is Peyto div safe?. Do they have plenty of cash flow to cover the div, do they still expect more cash flow in the future Thanks Ken
5i Research Answer:
The 12-month payout ratio is 28%, and PEY is in good financial shape. It also has some hedges in place to protect its gas prices on some production. Debt is about 1.2X cash flow, so nothing of concern there. The dividend was more than doubled in late 2022 but has not changed since then. With a market yield of more than 10%, some companies do look at their market yield and some will cut a dividend if that is what investors seem to be expecting (rightly or wrongly). But we would certainly say that PEY does not NEED to cut the dividend.