BP Prudhoe Bay Royalty Trust (BPT)

StockSpreadsheet (73.14) Submitted: 6/27/07 10:07 AM : Start Price: $58.43 BPT Score: 98.10

"Formed for the sole purpose of owning and administering the Royalty Interest from its working interest in the Prudhoe Bay Field, located on the North Slope of Alaska."

Average annual sales growth of 49% over last 4 years, though the growth rate slowed last year. Average annual EPS growth of 50% over last 4 years, though this also slowed last year. Thier pretax profit on sales has stayed steady at about 98% over the last 7 years. Their EPS/book value has been climbing the past 4 years and is now an increadable 2,000% while the price/book is about 184. Their ROE is about 2,000% and their ROA is about 1,000%. Clearly this company has very high profit margins. (Since they evidently haven't been spending any capital on maintenence on their pipelines in Alaska, it is no wonder that their profit margins are so high.) The company has no debt!! Their payout ratio is 100%, which is high, but if you don't spend any money you can afford to pay out all your revenues. The dividend yield is about 11.5%, which is very good. Their current P/E ratio of 8.3 is inline with their 5 year trailing average. Their trailing 4 year average PEG ratio is a rediculously low 0.17, which I don't think is sustainable. Assuming a slower growth rate of about 17%, (which is about what their growth rate was from 2005 to 2006), then I think this stock could hit $200 in five years, or about three times their current value of $70.18. Add in to that their very good dividend yield and I think this stock is a strong buy.

Report this Post Replies: 1 | Reply