Surge Energy: High FCF Yield Makes The Stock Finally Cheap Enough
Source: SeekingAlpha
2025-03-28 10:44:05 ET
Summary
- Surge Energy offers a compelling setup with a clean balance sheet, high FCF yield, and no cash taxes expected until 2030.
- The company remains solid with high-quality assets trading at a depressed valuation.
- At US$65 WTI, Surge generates a strong 16% FCF yield and a dividend yield of over 8%.
- Despite its high dividend yield, Surge is not suitable for retirement portfolios due to the risk of dividend cuts in lower oil price scenarios.
Surge Energy ( SGY:CA )( ZPTAF ) offers an interesting setup: a clean balance sheet, FCF yield exceeding 16% at $65 WTI, and a high payout ratio with no cash taxes expected until around 2030. However, investors should use a critical lens, as, in my opinion, the CEO, Paul Colborne, tends to over-sell the Surge story....
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Surge Energy: High FCF Yield Makes The Stock Finally Cheap Enough
Surge Energy
NASDAQ: ZPTAF
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