Coterra Energy: Huge Dividends Of 7.9%, Plus Large Buybacks, At 6x FCF

Apr. 13, 2022 3:37 AM ETCoterra Energy Inc. (CTRA) StockCTRA33 Comments

Summary

  • Coterra Energy is an oil and gas player, with one of the strongest balance sheets in the sector.
  • Coterra Energy is going to pay out approximately 7.9% as combined base dividend plus special dividend.
  • Also, a 5.9% to be returned to shareholders via buybacks.
  • I estimate that the stock is priced at just 6x this year's free cash flows. This is very enticing.
  • Looking for more investing ideas like this one? Get them exclusively at Deep Value Returns. Learn More »
oil barrels with rising chart

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Investment Thesis

Coterra Energy (NYSE:CTRA) is an E&P oil, natural gas, and NGL upstream company. On the one hand, it's cheaply valued, with strong shareholder returns of capital, which I estimate could reach around 13.8% yield.

What's more, I estimate that

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This article was written by

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.

With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months.

Through his 10+ years analyzing countless companies, Michael has accumulated outstanding professional experience in tech and energy and a following of over 40K on Seeking Alpha.

Michael is the leader of the Investing Group Deep Value Returns.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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