STR - Sitio Royalties: DJ Basin Acquisition Boosts FCF But May Delay An Increased Payout Ratio
2024-04-27 04:39:14 ET
Summary
- Sitio made a $150 million cash DJ Basin acquisition at a 4.0x multiple to asset level cash flow.
- The low purchase price multiple appears to be due to a high base decline rate and limited inventory.
- Sitio is projected to generate $2.75 per share in 2024 free cash flow.
- It may pay 35% to 65% of that out in dividends.
- An increased payout ratio may be delayed to 2026 due to Sitio's use of cash for its latest acquisition.
Sitio Royalties ( STR ) recently made a $150 million DJ Basin acquisition that helps boost its near-term free cash flow. This acquisition involves a relatively low 4.0x multiple to asset-level cash flow, which appears to be explained by limited inventory and a high base decline rate....
Sitio Royalties: DJ Basin Acquisition Boosts FCF, But May Delay An Increased Payout Ratio