ALVOF - Alvopetro: A Sustainable 11% Dividend Yield From This Natural Gas Producer

2023-03-25 11:45:00 ET

Summary

• Alvopetro Energy produces natural gas in Brazil. It sells the gas to a local company, thereby receiving premium prices north of $10/mcf.
• Prices are locked in for six month periods. This provides excellent near-term cash flow visibility.
• The dividend was recently hiked again, the stock now yields 11% and this requires just about 40% of the AFF.
• The anticipated growth capex + dividend should be fully funded by the incoming cash flows.
• The fair value based on the PV15 calculation of the 2P reserves is roughly 50% higher than the current share price.

For further details see: